Institutional investor ESG activism and corporate green innovation against climate change: Exploring differences between digital and non-digital firms

Chenfei Jin, Abel Monfort, Feng Chen, Neng Xia and Bao Wu

Technological Forecasting and Social Change, 2024, vol. 200, issue C

Abstract: This paper proposes that institutional investor ESG activism affects corporate green innovation through two attention mechanisms: intra-firm allocation of attention and inter-firm integration of attention. Using the attention-based view within an agency framework, we explore the moderating roles of media coverage and industrial chain relatedness in attention mechanisms, and whether such moderating effects differ in digital and non-digital firms. Using a dataset of 2726 Chinese listed firms from 2007 to 2021, we find that ESG activism by institutional investors enhances corporate green innovation, and media coverage strengthens this positive linkage. The positive moderating role of media coverage is more impactful in digital firms than in non-digital firms. An unexpected finding is that industrial chain relatedness negatively moderates the influence of ESG activism on green innovation, but this negative moderation is alleviated in digital firms. These findings provide novel implications for firms as they address agency conflicts through shareholder activism and advance green innovation in the digital era.

Keywords: ESG activism; Green innovation; Media coverage; Industrial chain relatedness; Digitalization (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:200:y:2024:i:c:s0040162523008144

DOI: 10.1016/j.techfore.2023.123129

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