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Corporate reputation gains from green innovation: Moderating effects of subsidies and eco-friendly products

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  • Iftikhar, Kainat
  • Bagh, Tanveer
  • Shabbir, Muhammad Nadir

Abstract

Green innovation is increasingly recognized as a strategic driver of sustainable development and corporate reputation. This study investigates the impact of green innovation on corporate reputation among Chinese listed firms from 2014 to 2022, employing rigorous identification techniques, including instrumental variable regression and propensity score matching, to address endogeneity. The findings demonstrate that green innovation significantly enhances corporate reputation. Furthermore, the analysis highlights the moderating roles of government subsidies and environmentally friendly products, indicating that subsidies can diminish the positive effects of green innovation. In contrast, firms producing green products experience greater benefits in terms of reputation. The mediating role of environmental certification in strengthening the relationship between green innovation and corporate reputation is also established. Cross-sectional analyses reveal asymmetrical influence of green innovation across high-tech, polluted, and environmentally friendly firms. Overall, this research contributes to existing literature and provides valuable policy insights for policymakers and business analysts, emphasizing the importance of balancing government support and market-driven approaches to enhance corporate reputation through green innovation.

Suggested Citation

  • Iftikhar, Kainat & Bagh, Tanveer & Shabbir, Muhammad Nadir, 2025. "Corporate reputation gains from green innovation: Moderating effects of subsidies and eco-friendly products," Research in International Business and Finance, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:riibaf:v:80:y:2025:i:c:s0275531925003642
    DOI: 10.1016/j.ribaf.2025.103108
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    Keywords

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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