The green promotion back to digitization: Research on air quality, urban green coverage and digital innovation

Danqin Yang, Fangzhi Liang and Yuhang Qian

International Review of Financial Analysis, 2024, vol. 96, issue PA

Abstract: We examine the relationship between air quality, urban green coverage, and the digital innovation of companies in this paper. Using a sample of Chinese A-share listed companies spanning from 2006 to 2016, we discover a positive effect of air quality on companies' digital innovation. Furthermore, urban green coverage enhances this positive relationship through the environmental effect and signaling effect. In mechanism analysis, we find that improved air quality correlates with digital investment attraction, digital human resource immigration, and digital R&D efficiency enhancement channels, subsequently contributing to the advancement of digital innovations among companies. The positive impact of air quality on digital innovation is particularly pronounced in non-state-owned enterprises and under stricter government air policy regulations. Additionally, our study shows that while air quality significantly boosts total innovation by enhancing digital innovation, it has a minimal effect on non-digital innovation. Our findings underscore the importance of paying attention to air quality and promoting green environmental initiatives in the digital era.

Keywords: Air quality; Urban green coverage; Digital innovation (search for similar items in EconPapers)
JEL-codes: G31 O33 Q53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005337

DOI: 10.1016/j.irfa.2024.103601

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