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How Does Market Demand Incentivize Green Innovation in Resource‐Based Industries? Evidence From China

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  • Feng Peng
  • Mengke Hu

Abstract

Promoting green innovation in resource‐based industries is crucial for sustainable socio‐economic development. However, existing research has yet to fully elucidate the mechanisms through which market demand incentivizes green innovation within China's resource‐based industries. Grounded in the Resource‐Based View and Stakeholder Theory, this study constructs a systematic framework for analyzing the antecedents of green innovation in resource‐based industries. This paper examines how market demand incentivizes green innovation in China's resource‐based industries from a configurational perspective, by integrating three methodologies: Network DEA, NCA, and QCA. The findings reveal that market demand is a key determinant of green innovation in China's resource‐based industries. However, high market demand alone is insufficient for these industries to achieve high green innovation. To exert a synergistic effect, market demand must be configured in combination with other antecedent conditions. The analysis identifies three distinct configurational paths leading to high green innovation within resource‐based industries. Conversely, two configurational paths result in non‐high green innovation. Critically, the absence of market demand emerges as a critical prerequisite for low green innovation in resource‐based industries. This research provides a theoretical framework for clarifying the mechanism by which market demand influences green innovation in resource‐based industries. Furthermore, it offers a decision‐making basis for diverse subsectors within these industries to achieve green innovation.

Suggested Citation

  • Feng Peng & Mengke Hu, 2026. "How Does Market Demand Incentivize Green Innovation in Resource‐Based Industries? Evidence From China," American Journal of Economics and Sociology, Wiley Blackwell, vol. 85(1), pages 113-127, January.
    • Handle: RePEc:bla:ajecsc:v:85:y:2026:i:1:p:113-127
    DOI: 10.1111/ajes.70005
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