The Impact of Green Innovation on Corporate Performance: An Analysis Based on Substantive and Strategic Green Innovations

Mingxia Liu, Liqian Liu () and Amei Feng
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Mingxia Liu: School of Economics and Management, Wuhan University, Wuhan 430072, China
Liqian Liu: School of Economics and Management, Wuhan University, Wuhan 430072, China
Amei Feng: School of Economics, Wuhan Textile University, Wuhan 430072, China

Sustainability, 2024, vol. 16, issue 6, 1-19

Abstract: Green innovation is a new approach to achieving sustainable social development. Examining whether firms can reap the rewards of this costly and risky endeavor is essential to assessing whether they can sustainably adhere to a green strategy. This study was conducted on a sample of Chinese A-share-listed firms from 2010 to 2021 and employed a two-way fixed-effects approach. We found that substantive and strategic green innovations significantly impact firms’ financial and environmental performance. Specifically, substantive green innovation leads to a significant improvement in financial performance, while strategic green innovation weakens financial performance; both types of green innovations lead to a significant improvement in environmental performance, with strategic green innovation being more effective in this regard compared to substantive green innovation. Moreover, our heterogeneity analyses showed that substantive green innovation has a weaker effect on improving financial performance in state-owned enterprises (SOEs) and in firms in regions with higher government environmental concerns; similarly, in SOEs, strategic green innovation has a weaker detrimental effect on financial performance. The findings of this study provide substantial evidence for promoting green innovation transformation and the upgrading of enterprises.

Keywords: green innovation; substantive green innovation; strategic green innovation; financial performance; environmental performance (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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