IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v18y2026i10p5082-d1945635.html

Environmental Provisions in Trade Agreements and Corporate Green Innovation Theory and Mechanisms

Author

Listed:
  • Xinheng Liu

    (Business School, Guilin University of Technology, Guilin 541104, China)

  • Xue Peng

    (Business School, Guilin University of Technology, Guilin 541104, China)

  • Lei Li

    (Business School, Guilin University of Technology, Guilin 541104, China)

  • Qi Ban

    (School of Finance, Nankai University, Tianjin 300350, China)

  • Zheng Xue

    (School of Finance, Nankai University, Tianjin 300350, China)

Abstract

Green innovation is vital for the sustainable economic development of countries. One effective way to protect the environment and promote sustainable economic development is through corporate green innovation. This paper uses data from Chinese listed companies and the Trade and Environment Database, which covers the period from 2013 to 2024, to examine how environmental regulatory provisions in trade agreements affect green innovation among Chinese enterprises and the underlying mechanisms. The study finds that environmental provisions in trade agreements can greatly encourage firms to innovate in a green way. This conclusion remains unchanged after a series of robustness tests. Analysis of the mechanisms reveals that environmental provisions in trade agreements inhibit firms’ green innovation through compliance costs, while promoting it through innovation compensation effects. However, the latter outweighs the former. Analysis of heterogeneity suggests that environmental legislation has a greater impact on green innovation within highly innovative, heavily polluting, non-state-owned, unauthorised firms.

Suggested Citation

  • Xinheng Liu & Xue Peng & Lei Li & Qi Ban & Zheng Xue, 2026. "Environmental Provisions in Trade Agreements and Corporate Green Innovation Theory and Mechanisms," Sustainability, MDPI, vol. 18(10), pages 1-22, May.
    • Handle: RePEc:gam:jsusta:v:18:y:2026:i:10:p:5082-:d:1945635
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/18/10/5082/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/18/10/5082/
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:gam:jsusta:v:18:y:2026:i:10:p:5082-:d:1945635. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    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.