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Does global diversification promote or hinder green innovation? Evidence from Chinese multinational corporations

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  • Zhou, Chao
  • Lin, Feng

Abstract

Green innovation plays a critical role in facilitating firms to achieve sustainable development. This study aims to investigate how global diversification affects green innovation. Existing literature suggests that global diversification can have both positive and negative effects on firms' engagement in green innovation. While it can increase firms' pressure and ability to participate in green innovation activities, thereby promoting their green innovation efforts, it can, however, be utilized to evade environmental responsibility, thereby hindering their green innovation efforts. In an empirical analysis focusing on a sample of Chinese multinational corporations (MNCs) from 2008 to 2020, MNCs' global diversification is found to affect their green innovation significantly and positively. Moreover, the positive effect of global diversification on green innovation is enhanced by factors, such as the host country's institutional quality, state ownership, and the CEO's academic experience. The findings suggest that global diversification can facilitate Chinese MNCs' engagement in green innovation activities rather than being utilized to evade environmental responsibility. Furthermore, the results reveal that the positive effect of global diversification on green innovation depends on the external and internal environments in which MNCs operate. Overall, this study provides new insight into the determinants of corporate green innovation in emerging market MNCs.

Suggested Citation

  • Zhou, Chao & Lin, Feng, 2024. "Does global diversification promote or hinder green innovation? Evidence from Chinese multinational corporations," Technovation, Elsevier, vol. 129(C).
    • Handle: RePEc:eee:techno:v:129:y:2024:i:c:s016649722300216x
    DOI: 10.1016/j.technovation.2023.102905
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    More about this item

    Keywords

    Global diversification; Green innovation; Institutional quality; State ownership; CEO academic experience; Chinese multinational corporations;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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