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Firms’ participation in environmental protection standard-setting and corporate green innovation

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  • Zhao, Mu
  • Wang, Mingshuan

Abstract

Proactive participation in environmental protection standard-setting has increasingly become a key driving force for corporate green innovation. Based on dynamic capabilities theory, this study examines the effect of firms’ participation in environmental protection standard-setting on corporate green innovation using hand-collected data matched with Chinese A-share listed firms from 2011 to 2023. The results of this study reveal that participation in environmental protection standard-setting significantly promotes corporate green innovation through external green knowledge acquisition and internal green technology diffusion. This effect is enhanced when firms are led by executives with an environmental background and possess strong green technology absorptive capacity. The results of the heterogeneity analysis reveal that the impact is more pronounced for enterprises with greater media environmental attention, those with stricter environmental regulations, and those that are not state-owned enterprises. Further analysis reveals that involvement in environmental protection standard-setting primarily enhances substantive green innovation over symbolic innovation and favors clean production-oriented innovations rather than end-of-pipe solutions. Additionally, participation in market-led rather than government-led standard-setting is more likely to drive corporate green innovation. Moreover, in the long term, such involvement enhances firms’ sustainable green innovation capabilities.

Suggested Citation

  • Zhao, Mu & Wang, Mingshuan, 2026. "Firms’ participation in environmental protection standard-setting and corporate green innovation," Economic Analysis and Policy, Elsevier, vol. 91(C), pages 1598-1625.
    • Handle: RePEc:eee:ecanpo:v:91:y:2026:i:c:p:1598-1625
    DOI: 10.1016/j.eap.2026.05.016
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