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The Impact of Green Institutional Pressure from Local Governments on Corporate Innovation: An Empirical Evidence from Foreign-Invested Enterprises in China

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  • Dingqi Xue

    (School of International Business, Southwestern University of Finance and Economics, Chengdu 611130, China)

  • Yili Ding

    (School of Business, Macau University of Science and Technology, Macau 999078, China)

  • Lu Yu

    (School of Business, Chengdu University, Chengdu 610106, China)

  • Xinghua Deng

    (School of International Business, Southwestern University of Finance and Economics, Chengdu 611130, China)

Abstract

The natural environment of the human world has been deteriorating over the past few decades, and policies to protect the environment are receiving increasing attention from governments worldwide. The question of how green institutional pressures from local governments impact corporate behaviors, especially innovation behaviors, is a critical issue. However, the link between local governments’ institutional pressures and corporate innovative behaviors remains a matter of some dispute. This paper compiles data from foreign-invested enterprises in China, using the frequency of green development terms in the Chinese local governments’ annual reports as a key variable, and discusses the influence of local governments’ green institutional pressure on corporate innovation. The conclusions of this paper demonstrate that local governments’ institutional pressure has a promoting effect on corporate innovation, while the home country’s level of green knowledge reservoir has a negative moderating effect on this influence. Moreover, this conclusion exhibits heterogeneity across corporate nature, industry attributes, location characteristics, export experience and home country type.

Suggested Citation

  • Dingqi Xue & Yili Ding & Lu Yu & Xinghua Deng, 2023. "The Impact of Green Institutional Pressure from Local Governments on Corporate Innovation: An Empirical Evidence from Foreign-Invested Enterprises in China," Sustainability, MDPI, vol. 15(15), pages 1-18, July.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:15:p:11678-:d:1205213
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