IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v97y2025ics1059056024007445.html
   My bibliography  Save this article

Substantive innovation or strategic catering: Capital market pressure and corporate green innovation structure

Author

Listed:
  • Liu, Yingyuan
  • Chen, Wenhui
  • He, Xinyu

Abstract

Green innovation requires a market environment willing to take on more risk and accept failure. Capital markets are essential in green innovation because they can spread out the risks associated with innovation. Compared to existing research, this paper focuses on the impact and processes of the short-selling mechanism on corporate green technology innovation structure. Specifically, this study utilizes a difference-in-difference model to examine the effects and underlying mechanisms based on the listed firms from 2011 to 2022. The results suggest that the pressure from the capital market might encourage the development of green technological innovation in corporations. Still, it also hinders the establishment of a structure for corporate green innovation and fosters the expansion of strategic patent behavior. The influence is achieved through enhancing managerial performance, monitoring external pressures, and transmitting stock price information. Heterogeneous analysis confirms that independent directors ratio and CEO duality play a critical role. The findings demonstrate how capital market pressure can affect corporate green innovation structure, support the critical role of capital market and contribute to further engagement in corporate green technology innovation.

Suggested Citation

  • Liu, Yingyuan & Chen, Wenhui & He, Xinyu, 2025. "Substantive innovation or strategic catering: Capital market pressure and corporate green innovation structure," International Review of Economics & Finance, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:reveco:v:97:y:2025:i:c:s1059056024007445
    DOI: 10.1016/j.iref.2024.103752
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024007445
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.103752?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tan, Yafei & Zhu, Zhaohui, 2024. "The internationalization of capital market and corporate innovation capabilities: A quasi-natural experiment on the inclusion of China's A-shares in the MSCI index," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1021-1038.
    2. Bassen, Alexander & Kaspereit, Thomas & Buchholz, Daniel, 2021. "The Capital Market Impact of Blackrock’s Thermal Coal Divestment Announcement," Finance Research Letters, Elsevier, vol. 41(C).
    3. Li, Xiao-Lin & Li, Haofei & Ge, Xinyu & Si, Deng-Kui, 2023. "Capital market liberalization and systemic risk of non-financial firms: Evidence from Chinese Stock Connect scheme," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    4. Martin Nerlinger & Sebastian Utz, 2022. "The impact of the Russia-Ukraine conflict on the green energy transition – A capital market perspective," Swiss Finance Institute Research Paper Series 22-49, Swiss Finance Institute.
    5. Xiang, Xiaojian & Liu, Chuanjiang & Yang, Mian, 2022. "Who is financing corporate green innovation?," International Review of Economics & Finance, Elsevier, vol. 78(C), pages 321-337.
    6. Tang, Chang & Xu, Yuanyuan & Hao, Yu & Wu, Haitao & Xue, Yan, 2021. "What is the role of telecommunications infrastructure construction in green technology innovation? A firm-level analysis for China," Energy Economics, Elsevier, vol. 103(C).
    7. Dong, Shizheng & Zheng, Jianming & Jia, Haoyang & Zhang, Zili, 2023. "Impact of capital market internationalization on stock markets: Evidence from the inclusion of China A-shares in the MSCI Emerging Markets Index," Research in International Business and Finance, Elsevier, vol. 66(C).
    8. Sun, Yumeng, 2024. "Digital transformation and corporates' green technology innovation performance–The mediating role of knowledge sharing," Finance Research Letters, Elsevier, vol. 62(PA).
    9. Zeeshan Khan & Ramez Abubakr Badeeb & Changyong Zhang & Kangyin Dong, 2024. "Financial inclusion and energy efficiency: role of green innovation and human capital for Malaysia," Applied Economics, Taylor & Francis Journals, vol. 56(27), pages 3262-3277, June.
    10. Irfan, Muhammad & Razzaq, Asif & Sharif, Arshian & Yang, Xiaodong, 2022. "Influence mechanism between green finance and green innovation: Exploring regional policy intervention effects in China," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    11. Gao, Bin & Zhang, Jinlong & Xie, Jun & Zhang, Wenjie, 2023. "The impact of carbon risk on the pricing efficiency of the capital market: Evidence from a natural experiment in china," Finance Research Letters, Elsevier, vol. 57(C).
    12. Nerlinger, Martin & Utz, Sebastian, 2022. "The impact of the Russia-Ukraine conflict on energy firms: A capital market perspective," Finance Research Letters, Elsevier, vol. 50(C).
    13. Ren, He & Ye, Linlin & Zheng, Shi, 2024. "Share repurchase and capital market pricing efficiency," Finance Research Letters, Elsevier, vol. 60(C).
    14. Kałdoński, Michał & Jewartowski, Tomasz & Mizerka, Jacek, 2020. "Capital market pressure, real earnings management, and institutional ownership stability - Evidence from Poland," International Review of Financial Analysis, Elsevier, vol. 71(C).
    15. Treepongkaruna, Sirimon & Padungsaksawasdi, Chaiyuth, 2024. "Green innovation and shareholder litigation rights," Finance Research Letters, Elsevier, vol. 62(PA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deng, Fukang & Chen, Xiaofang, 2024. "Executive compensation contract effectiveness and firms' green technology innovation structure," Finance Research Letters, Elsevier, vol. 67(PA).
    2. Wei, Zhihua & Wu, Deqian & Zeng, Aimin & Li, Bo, 2024. "Spillover effects of MSCI inclusion announcement: Evidence and implications from China," Pacific-Basin Finance Journal, Elsevier, vol. 88(C).
    3. Wang, Yao, 2025. "Greenwashing or green evolution: Can transition finance empower green innovation in carbon-intensive enterprise?," International Review of Financial Analysis, Elsevier, vol. 97(C).
    4. Siyu Ren & Mingyue Du, 2024. "Will Green Finance Become a New Driving Force for Environmental Governance in The Post-Covid-19 Era: Evidence from China," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 27(1), pages 151-166, March.
    5. Silva, Thiago Christiano & Wilhelm, Paulo Victor Berri & Tabak, Benjamin Miranda, 2023. "Trade matters except to war neighbors: The international stock market reaction to 2022 Russia’s invasion of Ukraine," Research in International Business and Finance, Elsevier, vol. 65(C).
    6. Kumari, Vineeta & Hassan, Majdi & Pandey, Dharen Kumar, 2024. "Are high-income and innovative nations resilient to the Russia-Ukraine war?," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1268-1287.
    7. Wang, Xin & Ma, Chaoqun & Yao, Zheng, 2024. "The double-edged sword effect of digital capability on green innovation: Evidence from Chinese listed industrial firms," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 321-339.
    8. Cheng, Yuanyuan & Du, Kerui & Yao, Xin, 2023. "Stringent environmental regulation and inconsistent green innovation behavior: Evidence from air pollution prevention and control action plan in China," Energy Economics, Elsevier, vol. 120(C).
    9. Le, Thanh Ha, 2023. "Quantile time-frequency connectedness between cryptocurrency volatility and renewable energy volatility during the COVID-19 pandemic and Ukraine-Russia conflicts," Renewable Energy, Elsevier, vol. 202(C), pages 613-625.
    10. Peng Liang & Xinhui Sun, 2024. "Does digital transformation promote the green innovation of China’s listed companies?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 22199-22235, September.
    11. Wu, Feng-lin & Zhan, Xu-dong & Zhou, Jia-qi & Wang, Ming-hui, 2023. "Stock market volatility and Russia–Ukraine conflict," Finance Research Letters, Elsevier, vol. 55(PA).
    12. Wenqing Zhang & Jingrong Dong, 2023. "The Polarization Effect and Mechanism of China’s Green Finance Policy on Green Technology Innovation," Sustainability, MDPI, vol. 15(13), pages 1-26, June.
    13. Du, Lixia & Geng, Baiyang, 2024. "Financial technology and financing constraints," Finance Research Letters, Elsevier, vol. 60(C).
    14. Shao, Cuiying & Liu, Zhanyu, 2024. "Advancing green innovation through the establishment of data regulatory bodies: Insights from the Big Data Bureau in China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 308-325.
    15. Zhao, Ruizeng & Sun, Jiasen & Wang, Xinyue, 2024. "Synergistic impact of digital finance and urban agglomeration policy on carbon emission reduction," International Review of Economics & Finance, Elsevier, vol. 96(PB).
    16. Yang, Yajie & Zhao, Longfeng & Chen, Lin & Wang, Chao & Wang, Gang-Jin, 2025. "The spillover effects between renewable energy tokens and energy assets," Research in International Business and Finance, Elsevier, vol. 74(C).
    17. Feng, Gen-Fu & Niu, Peng & Wang, Jun-Zhuo & Liu, Jian, 2022. "Capital market liberalization and green innovation for sustainability: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 610-623.
    18. Balsalobre-Lorente, Daniel & Sinha, Avik & Murshed, Muntasir, 2023. "Russia-Ukraine conflict sentiments and energy market returns in G7 countries: Discovering the unexplored dynamics," Energy Economics, Elsevier, vol. 125(C).
    19. Dong, Zhenlin & Wang, Junzhi, 2024. "Does public data access stimulate the efficiency of corporate green innovation?," Finance Research Letters, Elsevier, vol. 65(C).
    20. Liu, Ting & Quan, Lei & Gao, Xing, 2023. "Social dishonesty and corporate green innovation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 967-985.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:97:y:2025:i:c:s1059056024007445. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.