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Green Innovation and Environmental Performance: The Moderating Roles of Governance and Policy

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  • Fatima Batool

    (School of Finance, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing 100081, China)

  • Muhammad Mohsin

    (Department of Computer Science, Bioengineering, Robotics and Systems Engineering (DIBRIS), University of Genoa, 16146 Genoa, Italy)

  • Belal Mahmoud Alwadi

    (Department of Basic Sciences, Al-Zaytoonah University of Jordan, Queen Alia Airport Street, Amman 11733, Jordan)

Abstract

This study investigates the impact of green innovation (GI) on corporate environmental performance (CEP), while examining the moderating roles of corporate governance practices (CGPs) and environmental policy pressure (EPP). This study uses advanced statistical methods to ensure the reliability of the results. These include techniques such as propensity score matching (PSM), difference-in-differences (DID) analysis with China’s National Green Development Fund (2020) as the policy intervention, and the generalized method of moments (GMM), and this study examines how internal governance mechanisms and external regulatory pressures influence the GI-CEP relationship. The results show that GI significantly increases CEP, and that this effect is amplified by robust CGPs and EPP. By analyzing data from 4026 firm-year observations of A-share listed Chinese companies (2017–2022), the findings highlight the importance of innovation, governance, and policy in achieving sustainable environmental outcomes. This study provides valuable insights for firms and policymakers to foster green innovation and align corporate strategies with global sustainability goals.

Suggested Citation

  • Fatima Batool & Muhammad Mohsin & Belal Mahmoud Alwadi, 2025. "Green Innovation and Environmental Performance: The Moderating Roles of Governance and Policy," World, MDPI, vol. 6(1), pages 1-28, February.
    • Handle: RePEc:gam:jworld:v:6:y:2025:i:1:p:29-:d:1593152
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    References listed on IDEAS

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