Monitors and orchestrators: The dual roles of common state ownership on green innovation in energy-intensive firms

Green innovation is widely regarded as a critical driver of pollution and carbon reduction in energy-intensive firms. However, prior research has largely overlooked the widespread presence of state-driven common ownership networks among Chinese energy-intensive firms, leaving the black box of how this distinctive ownership structure shapes green innovation largely unopened. Using data from Chinese listed energy-intensive firms, we find that common state ownership significantly promotes green innovation. Mechanism tests suggest that this positive effect operates through the dual roles of common state owners: the monitor and the orchestrator. As monitors, common state owners can identify managers with environmental governance expertise within their portfolios, and strategically redeploy them to the boards of firms with weaker green governance, thereby strengthening substantive environmental oversight. As orchestrators, they help mitigate information asymmetry to foster green technology collaboration across portfolio firms, enabling the sharing of technical knowledge and R&D resources to alleviate innovation constraints. Heterogeneity analyses further indicate that central common state ownership has a stronger effect on green innovation and that common state ownership more strongly stimulates breakthrough green innovation. These findings not only contribute to the literature on the role of common state ownership in environmental governance but also offer valuable insights for advancing firms’ green transformation.