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Government environmental governance and firms’ green innovation: Evidence from listed firms in heavy pollution industries of China

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  • Zhang, Zhengyong
  • Dai, Xuan
  • Ding, Yi

Abstract

Based on the government work reports of 230 Chinese prefecture-level cities from 2007 to 2019, we create a new metric for government environmental governance by Python crawler technology. Using data from listed firms in heavy pollution industries, we find that government environmental governance significantly promotes firms’ green innovation, and the effect is a crowding-out of other innovation activities. Further analyses indicate that government environmental governance can enhance green innovation from both the end and source of the production and contributes significantly to both substantive and strategic green innovation. Meanwhile, the positive association is heterogenous by property rights and firm sizes.

Suggested Citation

  • Zhang, Zhengyong & Dai, Xuan & Ding, Yi, 2023. "Government environmental governance and firms’ green innovation: Evidence from listed firms in heavy pollution industries of China," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002209
    DOI: 10.1016/j.frl.2023.103848
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    References listed on IDEAS

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    More about this item

    Keywords

    Government environmental governance; Green innovation; Heavy pollution firms;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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