Green Technology Innovation and Enterprise Performance: An Analysis Based on Causal Machine Learning Models

Xuanai Huang, Yaozhong Wang, Ying Chen () and Zunguo Hu
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Xuanai Huang: School of Economics and Management, Changsha University of Science & Technology, Changsha 417000, China
Yaozhong Wang: School of Economics and Management, Changsha University of Science & Technology, Changsha 417000, China
Ying Chen: School of Finance and Economics, Guangdong Polytechnic Normal University, Guangzhou 510665, China
Zunguo Hu: School of Economics and Management, Changsha University of Science & Technology, Changsha 417000, China

Sustainability, 2024, vol. 16, issue 6, 1-16

Abstract: As increasingly stringent environmental regulations are put into effect, Environmental, Social, and Governance (ESG) concepts are being seamlessly integrated into the core of corporate innovation strategies. Due to the quasi-public product perspective of green innovation, the performance of enterprises as a result of green innovation activities exhibits significant heterogeneity. This heterogeneity exists not only between corporate value and financial performance but also among individual enterprises. This paper is based on a sample of 1510 listed Chinese companies examined from 2013 to 2020 and uses machine learning algorithms and quasi-natural experiments to precisely estimate the causal relationship and mechanisms between green innovation and corporate performance. The findings elucidate several critical aspects of green innovation within the corporate sphere: Firstly, rather than attracting green incentives from financial markets, green innovation activities inadvertently stifle the enhancement of corporate value. Secondly, these activities markedly bolster corporate financial performance, primarily by diminishing operational costs, which in turn elevates the return on assets (ROA). Lastly, of all corporate characteristics examined, enterprise size and equity concentration stand out as key determinants influencing the variability in outcomes of green innovation performance. The above findings provide information on the significant implications of enhancing green technology innovation systems and green incentive mechanisms.

Keywords: green innovation; enterprise performance; causal forest; machine learning (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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