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The Effect of Governance Structure on Green Technology Innovation: Based on the Internal Control Perspective

Author

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  • Liping Wu
  • Wenbin Tian
  • Yanbing Zhu
  • Oleksii Lyulyov
  • Tetyana Pimonenko

Abstract

In the context of escalating environmental challenges and the imperative for sustainable economic transformation, corporate governance has emerged as a pivotal determinant of green technological innovation (GTI). This study empirically examines the nexus between the governance structure (GS) and GTI within China's manufacturing sector, leveraging an extensive dataset spanning 2011–2021. Through fixed‐effects estimation and intermediary effect modelling, the analysis reveals that a well‐structured GS significantly enhances firms' capacity for technological advancement in sustainability‐oriented innovation. Specifically, the regression results indicate that a one‐unit increase in corporate governance quality (CorpGov) is associated with a 0.249 increase in GTI (Lnpatent) at the 1% confidence level, affirming the substantial role of governance reforms in driving sustainable innovation. A key contribution of this study lies in unveiling the mediating role of internal control, which channels the governance–innovation link by fostering strategic discipline, mitigating risk aversion, and optimizing resource allocation. The results show that internal control quality (CI) increases by 12.183 for each unit improvement in CorpGov (p

Suggested Citation

  • Liping Wu & Wenbin Tian & Yanbing Zhu & Oleksii Lyulyov & Tetyana Pimonenko, 2026. "The Effect of Governance Structure on Green Technology Innovation: Based on the Internal Control Perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 35(1), pages 681-698, January.
    • Handle: RePEc:bla:bstrat:v:35:y:2026:i:1:p:681-698
    DOI: 10.1002/bse.70202
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