Patient capital and firm green low-carbon cycle innovation

Facing the practical demand of building a green, low-carbon, and circular development economic system under the "carbon peak and neutrality" goals, guiding patient capital with long-term characteristics to support firm green innovation is crucial. Using Chinese A-share listed firms as a sample, this paper theoretically analyzes and empirically tests the impact of patient capital on firm green low-carbon cycle innovation. The study finds that patient capital significantly promotes firm green low-carbon cycle innovation, and this conclusion remains robust after a series of robust tests. Mechanism analysis indicates that patient capital primarily promotes firm green low-carbon cycle innovation by overcoming corporate short-termism, alleviating financing constraints, enhancing green innovation quality, and promoting the agglomeration of green star inventors. Heterogeneity analysis shows that the promoting effect of patient capital is more significant for non-state-owned enterprises, small and medium-sized enterprises, firms with high analyst coverage, non-dual-role firms, and in regions with strong environmental regulations or weak financial development. The conclusions of this paper offer valuable insights for understanding the governance and financial functions of patient capital, thereby guiding long-term capital to empower high-quality economic development.