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Intersecting paths: Corporate and green innovation in Chinese firms—A penal cointegration analysis

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  • ZhongJi Liu
  • Dan Hou
  • R M Ammar Zahid

Abstract

In today’s dynamic and competitive business landscape, innovation is paramount for companies striving to maintain a competitive edge. Among various innovation strategies, corporate green innovation has gained prominence as an efficient means of achieving sustainable growth. In response to the pressing need for sustainable development, this study investigates the bidirectional cointegration link between green innovation and overall corporate innovation in a panel dataset of Chinese-listed enterprises.As China emphasizes principles like "greening" and "innovation" for twenty-first-century development, this research aligns with the nation’s goal of fostering sustainable industry growth through "green innovation”. It employs panel cointegration tests, including the Westerlund test, dynamic panel ordinary least square (DOLS), and the panel vector error correction model (VECM), using data from Chinese A-listed firms spanning from 2008 to 2020. The study reveals a robust long-term, bidirectional relationship between corporate innovation and green innovation. Notably, it demonstrates that green innovation causally impacts corporate innovation in both the short and long term. This research also conducts subsample analysis, ensuring the robustness of the main findings across both non-polluted and polluted industries. These findings provide valuable insights into how corporate innovation factors influence corporate green innovation. Consequently, they offer valuable insights for policymakers and organizations, aiding in the formulation of policies that promote environmentally friendly innovation while elevating corporate innovation standards.

Suggested Citation

  • ZhongJi Liu & Dan Hou & R M Ammar Zahid, 2024. "Intersecting paths: Corporate and green innovation in Chinese firms—A penal cointegration analysis," PLOS ONE, Public Library of Science, vol. 19(1), pages 1-19, January.
    • Handle: RePEc:plo:pone00:0295633
    DOI: 10.1371/journal.pone.0295633
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    References listed on IDEAS

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