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Environmental Justice and Corporate Green Innovation: The Role of Legitimacy Pressures

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  • Guoyi Zhang

    (School of Economics, Southwestern University of Finance and Economics, Chengdu 611130, China)

  • Dong Chen

    (School of Economics, Southwestern University of Finance and Economics, Chengdu 611130, China)

Abstract

This study examines the impact of environmental judicial reinforcement on green technology innovation, constructing a progressive difference-in-differences model using firm- and city-level panel data from 2006 to 2019 and taking the successive establishment of environmental courts by the Intermediate People’s Court in Chinese prefectural-level cities as a quasi-natural experiment. We find that establishing environmental courts in China promotes green technology innovation. This finding still holds after a series of robustness tests such as selected fixed-effects Poisson model regression. The mechanism analysis suggests that environmental courts primarily promote increased green innovation output by heavily polluting firms by exerting more substantial pressure regarding environmental legitimacy. The heterogeneity analysis reveals that the positive impact of the establishment of environmental courts on green technology innovation is more pronounced in water pollution-intensive industries and areas with high public participation and media attention. Our findings provide new insights into how environmental justice affects firms’ green innovation and validate the Porter hypothesis. Also, they serves as a reference for constructing environmental courts in China and other policy jurisdictions that may be interested.

Suggested Citation

  • Guoyi Zhang & Dong Chen, 2024. "Environmental Justice and Corporate Green Innovation: The Role of Legitimacy Pressures," Sustainability, MDPI, vol. 16(13), pages 1-19, June.
  • Handle: RePEc:gam:jsusta:v:16:y:2024:i:13:p:5599-:d:1425930
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    References listed on IDEAS

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    Cited by:

    1. Shih-Ting Huang & Yuqi Zhang & Tianjiao Yi & Li Zhang, 2025. "How Does the Ecological and Environmental Damage Compensation System Affect Industrial Wastewater Discharge in China?," Sustainability, MDPI, vol. 17(5), pages 1-18, February.
    2. Yue Meng & Xiaolei Yang, 2024. "Environmental Justice Specialization and Corporate ESG Performance: Evidence from China Environmental Protection Court," Sustainability, MDPI, vol. 16(21), pages 1-20, November.

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