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How Does Environmental Innovation Affect Firms' Long‐Term Performance? An Analysis Based on Different Innovation Motivations

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  • Zhongju Liao
  • Peiyan Zheng
  • Ke Chen
  • Yufei Wang

Abstract

Firms' motivation for implementing environmental innovation and the mechanisms behind the impact of environmental innovation on long‐term performance are topics of interest in the context of sustainable development. This study analyzed data from 600 Chinese manufacturing listed firms from 2016 to 2022, using multiple regression and inter‐group difference analyses based on the attribution theory and resource‐based view. The findings indicate that environmental innovation enhances firms' long‐term performance. Environmental innovation driven by altruistic and strategic motivations results in a greater improvement in firms' long‐term performance than environmental innovation driven by egoistic motivations. Government subsidies play a mediating role between environmental innovation and long‐term performance; however, customer relationships do not. This study provides guidance for firms to implement environmental innovation, achieve sustainable development, and shape their value orientation.

Suggested Citation

  • Zhongju Liao & Peiyan Zheng & Ke Chen & Yufei Wang, 2025. "How Does Environmental Innovation Affect Firms' Long‐Term Performance? An Analysis Based on Different Innovation Motivations," Business Strategy and the Environment, Wiley Blackwell, vol. 34(6), pages 7687-7699, September.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:6:p:7687-7699
    DOI: 10.1002/bse.4370
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