Does Business Group Matter for the Relationship between Green Innovation and Financial Performance? Evidence from Chinese Listed Companies

Qiang Xu, Lian Xu, Zaiyang Xie and Mufan Jin
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Qiang Xu: School of Management, Zhejiang University of Technology, Hangzhou 310023, China
Lian Xu: School of Management, Zhejiang University of Technology, Hangzhou 310023, China
Zaiyang Xie: School of Management, Zhejiang University of Technology, Hangzhou 310023, China
Mufan Jin: School of Management, Zhejiang University of Technology, Hangzhou 310023, China

Sustainability, 2021, vol. 13, issue 23, 1-16

Abstract: Green innovation has been an important approach for firms to achieve sustainable development in recent years; however, empirical studies on the relationship between green innovation and corporate performance have delivered mixed results. In particular, business groups (BG), which are a critical organizational form in many economies and are proven to have unique advantages for conducting green innovation, have attracted less scholarly attention. Therefore, in this study, we adopt the perspective of a business group and investigate how green innovation by BG-affiliated firms affects their financial performance, and we also explore the moderating effect of BG’s internal supply chain partnership. Based on a sample of 202 listed manufacturing enterprises in China from 2013 and 2017, the research results show that green innovation significantly improves the financial performance of firms, and this positive effect is more prominent in BG-affiliated firms than in non-BG firms. Further research found that BG-affiliated firms’ supply chain (suppliers and customers) concentration and trust positively moderate the relationship between green innovation and financial performance. This research concerns the particularity of business groups’ green innovation practices in China, which not only contributes to the research on the effect of BG’s green innovation on corporate performance in an emerging market context but also deepens our understanding of the role of its internal supply chain partnership from the perspective of concentration and trust.

Keywords: green innovation; business group; supply chain partnership; financial performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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