ISO 14001 Certification and Corporate Technological Innovation: Evidence from Chinese Firms

While a growing body of literature has examined the link between green activities and firm innovation, little attention has been paid to the underlying mechanisms through which green activities take effect. This paper leverages the context of ISO 14001 certification among Chinese listed firms to investigate how the certification of environmental management system (EMS) to ISO 14001 shapes corporate technological innovation. Drawing from the resource-based view and the resource management perspective, we argue that EMS certification to ISO 14001 facilitates corporate technological innovation through the mediating effects of firms’ internal resource management practices, namely resource utilization, resource accumulation, and resource allocation. A difference-in-differences research design, together with the propensity score matching approach and the instrumental variable technique, provides corroborating evidence for our predictions. The current research not only makes substantial contributions to the literature, but also provides important ethical implications for both policymakers and firm managers.