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Green innovation, firm performance, and risk mitigation: evidence from the USA

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  • Lewis Liu

    (The University of Queensland)

Abstract

This research examines the correlation between corporate green innovation and its positive impacts by analyzing firm-level data from the S&P 500 spanning the years 2001 to 2022. Drawing on previous studies, this research employs rigorous methodologies and measures to assess the influence of green innovation. The study investigates the drivers of green innovation and assesses its potential effects on firm performance and risk reduction. Firstly, it explores the factors that contribute to the adoption of green innovation. Secondly, it examines how green innovation affects firm performance and mitigates risks. The findings of the study demonstrate that implementing green innovation leads to a reduction in firm volatility and credit risk, while also enhancing firm value and emission performance. The robustness tests conducted further reinforce these conclusions, thereby contributing to the existing body of literature that highlights the crucial role of corporate characteristics in promoting sustainable business practices through green innovation. These insights hold significant value for investors, policymakers, and regulators, providing them with valuable information for making informed decisions regarding green investments and the formulation of policies that foster sustainability through green innovation.

Suggested Citation

  • Lewis Liu, 2024. "Green innovation, firm performance, and risk mitigation: evidence from the USA," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 24009-24030, September.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:9:d:10.1007_s10668-023-03632-z
    DOI: 10.1007/s10668-023-03632-z
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    References listed on IDEAS

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    Cited by:

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    4. Diana Claudia Perțicas & Adrian Gheorghe Florea & Viktor Borodin & Mouna Hajjaj & Claudia Diana Sabau-Popa, 2025. "The Study on Corporate Sustainability Entrepreneurship in Romania: Analysis on Dependencies of Economical State of the Corporation on Their Green Politics Through Eyes of Their Management," Sustainability, MDPI, vol. 17(5), pages 1-25, March.

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    More about this item

    Keywords

    Green innovation; Risk mitigation; Environmental investment; Firm performance;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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