Will companies take the initiative in green technology innovation? Empirical evidence from listed manufacturing companies in China

Green technology innovation (GTI) is an important driver for national green development and a strong fulcrum for the clean production of companies. This paper focuses on the impact of top management team’s (TMT’s) inherent characteristics on GTI from the perspectives of TMT heterogeneity and text tone in management discussion and analysis (MD&A), as well as the moderating role of executive compensation incentives and financial constraints. The results reveal that: a) the TMT heterogeneity has different effects on companies’ GTI; b) the tone in MD&A can significantly promote the companies’ GTI; c) both executive compensation incentives and financial constraints significantly adjust the relationship between the TMT heterogeneity or the tone in MD&A on GTI but in different directions. Moreover, the basic conclusions suitable for non-state-owned companies yet differ in state-owned companies considering the property heterogeneity. Thus, this paper constructs a new integrated framework of TMT heterogeneity, tone in MD&A, executive compensation incentives and financial constraints to stimulate the enthusiasm and initiative of companies to develop GTI, which has an important practical significance on accelerating the sustainable development of green production in developing countries. Finally, this paper offers corresponding policy recommendations.