 How Does Government Supervision Affect Firms' Environmental Innovation? The Role of Attention Allocation and Political ConnectionsZhongju Liao, Mengnan Zhang and Jie Chen Business Strategy and the Environment, 2025, vol. 34, issue 8, 10844-10855 Abstract: Government supervision is one of the most critical factors affecting firms' adoption of environmental innovation behaviors. Drawing on legitimacy theory and the attention‐based view, we propose that attention allocation mediates the link between government supervision and firms' environmental innovation, while political connections moderate the relationship. We test our hypotheses using a sample of 10,131 observations for 921 A‐share manufacturing companies listed on the Shanghai and Shenzhen Stock Exchanges between 2012 and 2022. The results show that government supervision has a positive role in promoting environmental innovation in manufacturing firms. Firms' policy‐attention allocation plays a partial mediating role in the government supervision–environmental innovation relationship, while political connections weaken the positive effect of policy‐attention allocation on environmental innovation. The study unveils important practical implications for governments to improve supervision and for firms to enhance their environmental innovation. Date: 2025 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:34:y:2025:i:8:p:10844-10855 Ordering information: This journal article can be ordered from Access Statistics for this article Business Strategy and the Environment is currently edited by Richard Welford More articles in Business Strategy and the Environment from Wiley Blackwell |
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