IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v19y2022i19p11969-d921718.html
   My bibliography  Save this article

Is the R&D Expenditure of Listed Companies Green? Evidence from China’s A-Share Market

Author

Listed:
  • Boyu Li

    (School of Economics and Business Administration, Chongqing University, Chongqing 400030, China)

  • Lishan Li

    (School of Economics and Business Administration, Chongqing University, Chongqing 400030, China)

  • Tianlei Pi

    (School of Economics and Business Administration, Chongqing University, Chongqing 400030, China)

Abstract

Whether the company’s R&D expenditure has the green attribute is the focus of current environmental economics research. This paper empirically tests the relationship between R&D expenditure and CO 2 emission intensity by taking Chinese A-share listed companies, from 2016 to 2020, as samples. The research found that the R&D expenditure of the company has a significant green effect of reducing its carbon dioxide emission intensity. Further research shows that the institutional investors play a mediating role in the relationship between R&D expenditure and CO 2 emission intensity. And the “governance effect” of institutional investors is affected by “short-termism”, which leads to the “myopic” of enterprises’ management and urges them to invest in the short term, thus being detrimental to the company’s environmental performance. In addition, the green attribute of R&D expenditure only exists in the company which has a high concentration of institutional investors, indicating that the institutional investors possess the ability to identify the green value of R&D investment. Extended discussion shows that the investment of R&D personnel plays a moderating role in the first half path of the above mediating mechanism, which weakens the negative relationship between institutional investors and R&D investment. This paper provides empirical evidence for the government to improve environmental performance at the enterprise level. The results of this study show that, in order to reduce the CO 2 emission intensity of enterprises, the government should improve incentives for enterprise R&D, make rational use of the information identification ability of institutional investors, advocate long-term investment philosophy, and strengthen the training of R&D team leaders and technicians.

Suggested Citation

  • Boyu Li & Lishan Li & Tianlei Pi, 2022. "Is the R&D Expenditure of Listed Companies Green? Evidence from China’s A-Share Market," IJERPH, MDPI, vol. 19(19), pages 1-16, September.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:11969-:d:921718
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/19/19/11969/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/19/19/11969/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    2. Azar, José & Duro, Miguel & Kadach, Igor & Ormazabal, Gaizka, 2021. "The Big Three and corporate carbon emissions around the world," Journal of Financial Economics, Elsevier, vol. 142(2), pages 674-696.
    3. Green, T. Clifton & Jame, Russell & Markov, Stanimir & Subasi, Musa, 2014. "Access to management and the informativeness of analyst research," Journal of Financial Economics, Elsevier, vol. 114(2), pages 239-255.
    4. Tomás F. González-Cruz & Dolores Botella-Carrubi & C. M. Martínez-Fuentes, 2020. "The effect of firm complexity and founding team size on agile internal communication in startups," International Entrepreneurship and Management Journal, Springer, vol. 16(3), pages 1101-1121, September.
    5. Haiyan Duan & Xize Dong & Pinlei Xie & Siyan Chen & Baoyang Qin & Zijia Dong & Wei Yang, 2022. "Peaking Industrial CO 2 Emission in a Typical Heavy Industrial Region: From Multi-Industry and Multi-Energy Type Perspectives," IJERPH, MDPI, vol. 19(13), pages 1-30, June.
    6. Jiang, Xuanyu & Yuan, Qingbo, 2018. "Institutional investors' corporate site visits and corporate innovation," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 148-168.
    7. Wang, Shaojian & Liu, Xiaoping & Zhou, Chunshan & Hu, Jincan & Ou, Jinpei, 2017. "Examining the impacts of socioeconomic factors, urban form, and transportation networks on CO2 emissions in China’s megacities," Applied Energy, Elsevier, vol. 185(P1), pages 189-200.
    8. Fisher-Vanden, Karen & Sue Wing, Ian, 2008. "Accounting for quality: Issues with modeling the impact of R&D on economic growth and carbon emissions in developing economies," Energy Economics, Elsevier, vol. 30(6), pages 2771-2784, November.
    9. Kent Walker & Na Ni & Weidong Huo, 2014. "Is the Red Dragon Green? An Examination of the Antecedents and Consequences of Environmental Proactivity in China," Journal of Business Ethics, Springer, vol. 125(1), pages 27-43, November.
    10. Charles H. Cho & Jay Heon Jung & Byungjin Kwak & Jaywon Lee & Choong-Yuel Yoo, 2017. "Professors on the Board: Do They Contribute to Society Outside the Classroom?," Journal of Business Ethics, Springer, vol. 141(2), pages 393-409, March.
    11. Boone, Audra L. & White, Joshua T., 2015. "The effect of institutional ownership on firm transparency and information production," Journal of Financial Economics, Elsevier, vol. 117(3), pages 508-533.
    12. Vivian W. Fang & Xuan Tian & Sheri Tice, 2014. "Does Stock Liquidity Enhance or Impede Firm Innovation?," Journal of Finance, American Finance Association, vol. 69(5), pages 2085-2125, October.
    13. Steve Lydenberg, 2014. "Reason, Rationality, and Fiduciary Duty," Journal of Business Ethics, Springer, vol. 119(3), pages 365-380, February.
    14. Céline Louche & Timo Busch & Patricia Crifo & Alfred Marcus, 2019. "Financial Markets and the Transition to a Low-Carbon Economy: Challenging the Dominant Logics," Post-Print hal-02016756, HAL.
    15. Daniel Ferreira & Gustavo Manso & André C. Silva, 2014. "Incentives to Innovate and the Decision to Go Public or Private," The Review of Financial Studies, Society for Financial Studies, vol. 27(1), pages 256-300, January.
    16. Jong, Thijs & Couwenberg, Oscar & Woerdman, Edwin, 2014. "Does EU emissions trading bite? An event study," Energy Policy, Elsevier, vol. 69(C), pages 510-519.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Weiyu Zhang & Xinyue Li & Shaowei Liu & Jong-wook Kwon, 2023. "The Chairman’s Rural Origin and Short-Term Expenditures in China," Sustainability, MDPI, vol. 15(18), pages 1-20, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qi, Zhen & Chu, Chien-Chi & Zhou, Yixiao & Chen, Jian, 2022. "Corporate site visits and firm performance," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 598-608.
    2. Xiangchao Hao & Qingbin Meng & Kaijuan Gao & Kam C. Chan, 2020. "The impact of initial public offerings on innovations: Short‐termism or initial governance force exit?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(6), pages 924-942, September.
    3. Hyoseok (David) Hwang, 2023. "The real effects of local mutual funds: Evidence from corporate innovation," International Review of Finance, International Review of Finance Ltd., vol. 23(2), pages 272-300, June.
    4. Zhang, Dan & Pan, Xiaofei & Ma, Shiguang, 2023. "The effects of institutional investors and their contestability on firm innovation: Evidence from Chinese listed firms," Research Policy, Elsevier, vol. 52(10).
    5. Gao, Kaijuan & Shen, Hanxiao & Gao, Xi & Chan, Kam C., 2019. "The power of sharing: Evidence from institutional investor cross-ownership and corporate innovation," International Review of Economics & Finance, Elsevier, vol. 63(C), pages 284-296.
    6. Hao, Jing, 2023. "Retail investor attention and corporate innovation in the big data era," International Review of Financial Analysis, Elsevier, vol. 86(C).
    7. Zhou, Taiyun & Liu, Mingxuan & Zhang, Xiyu & Qi, Zheng & Qin, Ni, 2024. "Does institutional ownership affect corporate social responsibility? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 84-98.
    8. Ross Levine & Chen Lin & Lai Wei, 2017. "Insider Trading and Innovation," Journal of Law and Economics, University of Chicago Press, vol. 60(4), pages 749-800.
    9. Guo, Bing & Pérez-Castrillo, David & Toldrà-Simats, Anna, 2019. "Firms’ innovation strategy under the shadow of analyst coverage," Journal of Financial Economics, Elsevier, vol. 131(2), pages 456-483.
    10. Ma, Guangyuan & Wang, Yihong & Xu, Yekun & Zhang, Limin, 2023. "The breadth of ownership and corporate earnings management," Finance Research Letters, Elsevier, vol. 52(C).
    11. Zhu, Hui & Zhu, Steven X., 2017. "Corporate innovation and economic freedom: Cross-country comparisons," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 50-65.
    12. Liang Tang & Zhen Gu & Qi Zhang & Jiali Liu, 2022. "RETRACTED ARTICLE: The effect of firm size, industry type and ownership structure on the relationship between firms' sustainable innovation capability and stock liquidity," Operations Management Research, Springer, vol. 15(3), pages 825-837, December.
    13. Dan Zhang & Shiguang Ma & Xiaofei Pan, 2021. "Institutional investors, controlling shareholders and CEO pay‐performance relationship: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 467-498, March.
    14. Linyan Fan & Sheng Yao, 2022. "Analyst Site Visits and Corporate Environmental Information Disclosure: Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-21, December.
    15. Re-Jin Guo & Nan Zhou, 2016. "Innovation capability and post-IPO performance," Review of Quantitative Finance and Accounting, Springer, vol. 46(2), pages 335-357, February.
    16. Acharya, Viral & Xu, Zhaoxia, 2017. "Financial dependence and innovation: The case of public versus private firms," Journal of Financial Economics, Elsevier, vol. 124(2), pages 223-243.
    17. Wang, Zhen & Chu, Erming & Hao, Yukai, 2024. "Towards sustainable development: How does ESG performance promotes corporate green transformation," International Review of Financial Analysis, Elsevier, vol. 91(C).
    18. Cai, Kelly & Zhu, Hui, 2020. "Does going public in the U.S. facilitate corporate innovation of foreign firms?," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    19. Tam, Lewis H.K. & Tian, Shaohua, 2023. "Language barriers, corporate site visit, and analyst forecast accuracy," The Quarterly Review of Economics and Finance, Elsevier, vol. 91(C), pages 68-83.
    20. Dan Zhang & Shiguang Ma & Xiaofei Pan, 2023. "How do institutional investors influence accounting conservatism in China?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S2), pages 2719-2754, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:11969-:d:921718. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.