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From social networks to sustainable solutions: Unpacking the influence of social capital on green innovation

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  • Li, Yuanshun
  • Liu, Liang
  • Li, Xinyuan
  • Zhang, Aoran

Abstract

This study examines how provincial-level social capital influences firm's green innovation effort. Utilizing panel data from 4695 companies listed on the Shanghai and Shenzhen stock exchanges between 2003 and 2022, the analysis reveals a strong and positive relationship between regional social capital and green innovation activities among local enterprises. Mechanism analyses suggest that government subsidies and executives' green backgrounds drive this positive relationship. Furthermore, we find that successfully granted green patents translate into superior financial and environmental performance for Chinese firms. Overall, these findings offer novel perspectives on the pivotal role of social capital in shaping businesses' green innovation output and yielding practical implications for leveraging social capital to promote sustainability initiatives.

Suggested Citation

  • Li, Yuanshun & Liu, Liang & Li, Xinyuan & Zhang, Aoran, 2025. "From social networks to sustainable solutions: Unpacking the influence of social capital on green innovation," China Economic Review, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:chieco:v:93:y:2025:i:c:s1043951x25001543
    DOI: 10.1016/j.chieco.2025.102496
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    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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