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Biodiversity risks and corporate innovation: Evidence from China

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  • Yongjian Lin
  • Zhicheng Song

Abstract

Whether firms adopt positive behaviors in response to biodiversity risk is a matter of public concern. In this paper, we investigate the impact of biodiversity risk exposure on corporate innovation. Based on a sample of Chinese A-share listed firms from 2007–2022, we find that biodiversity risk is significantly and positively related to corporate innovation. This promotion can be attributed to higher operating costs and enhanced analyst attention. Meanwhile, the positive impact of biodiversity risk on corporate innovation is more pronounced in firms with high investor sentiment, non-high-tech industries, and more liberalized capital markets. Additionally, the promotion of innovation by biodiversity risk is manifested more in substantive innovation. This study enriches the research on the consequences of biodiversity risk and the factors influencing firm innovation, expanding the boundaries of how environmental risk affects corporate decision-making.

Suggested Citation

  • Yongjian Lin & Zhicheng Song, 2026. "Biodiversity risks and corporate innovation: Evidence from China," PLOS ONE, Public Library of Science, vol. 21(3), pages 1-17, March.
    • Handle: RePEc:plo:pone00:0342348
    DOI: 10.1371/journal.pone.0342348
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    References listed on IDEAS

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    1. Alexandre Garel & Arthur Romec & Zacharias Sautner & Alexander Wagner, 2024. "Do investors care about biodiversity?," Post-Print hal-04649052, HAL.
    2. Alexandre Garel & Arthur Romec & Zacharias Sautner & Alexander F Wagner, 2024. "Do investors care about biodiversity?," Review of Finance, European Finance Association, vol. 28(4), pages 1151-1186.
    3. Ahmad, Muhammad Farooq & Karpuz, Ahmet, 2024. "Beyond climate change risk: Biodiversity and corporate cash holdings," Economics Letters, Elsevier, vol. 236(C).
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