Does environmental pollution liability insurance promote corporate green innovation? Empirical evidence from china’s high-polluting industries

Xiaoxu Kong, Xinxu Zhang and Chuanli Wang ()
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Xiaoxu Kong: Capital University of Economics and Business
Xinxu Zhang: Capital University of Economics and Business
Chuanli Wang: Capital University of Economics and Business

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 9, No 105, 23027-23049

Abstract: Abstract Environmental pollution liability insurance (EPLI) transfers environmental risks to insurance companies, influencing corporate green innovation (CGI). This study focused on A-share listed companies in China’s capital market from heavily polluting industries during 2014–2019 as the sample. A fixed-effects model was used to evaluate the impact of EPLI on CGI. EPLI data were manually collected from publicly available corporate disclosures, and a dummy variable was used for measurement. CGI was measured based on corporate patent data. The findings revealed that: (1) EPLI significantly enhanced CGI, playing both incentive and supervisory roles. (2) In the context of intangible resources, EPLI strengthens executives’ environmental awareness, thereby driving CGI. (3) In the context of tangible resources, EPLI increases corporate environmental investment, thereby promoting CGI. (4) Shareholding ratio of insurance companies, which reflects the intensity of resource bundling, strengthens the positive impact of EPLI on CGI. This study explored how EPLI, as a financial tool for promoting sustainable development, affects CGI. The study findings contribute to a deeper understanding of the economic consequences of EPLI and the factors influencing CGI. Additionally, this study provides empirical evidence and policy recommendations for developing countries to promote EPLI, improve green finance development, and promote sustainable corporate green development.

Keywords: Environmental pollution liability insurance; Green innovation; Environmental awareness; Environmental investments (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-025-06401-2

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