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Corporate green innovation behaviour and investment efficiency: evidence from China

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  • Chen Li
  • Yuminzi Fang
  • Ce Song

Abstract

Corporate green innovation has aroused attention from academics and practitioners in recent years, but the green innovation-investment decision nexus is less explored. Using Chinese-listed firms in the Shanghai and Shenzhen Stock Exchange from 2007 to 2019 as a sample, our research finds that green innovation significantly improves investment efficiency by mitigating over-investment. This finding still holds after addressing endogeneity tests and conducting additional robustness checks. Channel analysis shows that research and development expenditure is an underlying mechanism. Further examinations reveal that green innovation’s influence is more significant in non-politically connected, low-financing-constrained firms and firms with many independent directors. Our paper offers new insights into the influence at firm-level of concrete corporate social responsibility strategies, and the green innovation-investment decision nexus, and presents important policy implications for sustainable development.

Suggested Citation

  • Chen Li & Yuminzi Fang & Ce Song, 2024. "Corporate green innovation behaviour and investment efficiency: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 56(36), pages 4329-4343, August.
    • Handle: RePEc:taf:applec:v:56:y:2024:i:36:p:4329-4343
    DOI: 10.1080/00036846.2023.2210828
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    Cited by:

    1. Zhu, Yanli & Yin, Li & Lu, Xueyan, 2024. "Peer effects with multifaceted network dependence structures in R&D investment decisions: Evidence from Chinese listed firms," Research in International Business and Finance, Elsevier, vol. 70(PA).

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