Suppliers’ decision on green innovation: A response to customers’ environmental regulation

Yong Wang, Chunyang Song and Wenhao Wang

Finance Research Letters, 2023, vol. 58, issue PA

Abstract: This study examines whether customers’ environmental regulation (ER) affects suppliers’ green innovation. Relying on a unique dataset of customer–supplier relationships among listed firms in China, we demonstrate that suppliers’ green innovation increases in response to intensified ER pressure faced by customers. This finding holds even when considering alternative proxies of green innovation and ER, and an alternative sample. We also demonstrate that the impact of customers’ ER on suppliers’ green innovation is positively correlated with customers’ bargaining power. Our results contribute to the growing research on the crucial role of the supply chain in firms’ decision making processes.

Keywords: Environmental regulation; Green innovation; Supply chain; Market concentration (search for similar items in EconPapers)
JEL-codes: G38 Q55 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323007079

DOI: 10.1016/j.frl.2023.104335

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