Executive Accountability Pressure and Green Innovation: Evidence from China

Li Chen and Xiankun Deng ()
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Li Chen: School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
Xiankun Deng: School of Economics and Management, East China Jiaotong University, Nanchang 330013, China

Sustainability, 2024, vol. 17, issue 1, 1-25

Abstract: This study explores the influence of the accountability system on corporate green innovation. Using data on Chinese A-share-listed companies from 2013 to 2022, we found that the accountability system significantly promotes green innovations in state-owned enterprises (SOEs). Furthermore, the promoting effect is stronger in central SOEs as opposed to local SOEs. A mechanism analysis suggested that its positive effect may stem from improving corporate internal controls, curbing managerial myopia, and providing sufficient resources. In addition, heterogeneity tests suggested that the promoting effect of the accountability system on green innovation is more pronounced when the CEO is close to retirement or subject to high accountability pressure, in heavily polluting firms, and in regions with intense environmental regulations. Further analyses suggested that the accountability system also improves green innovation quality, persistence, and environmental performance. Our findings indicate that the accountability system has unexpected real effects on promoting corporate green innovation and sustainable development.

Keywords: the accountability system; green innovation; agency problem; internal controls; managerial myopia (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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