Audit risk and green innovation in SMEs

Daoxiang Yang, Xuyang Jiao and Wenjiu Liao

Finance Research Letters, 2025, vol. 76, issue C

Abstract: Although audit risk is important for corporate sustainability, its relationship with sustainable practices in small- and medium-sized enterprises (SMEs) remains understudied. This study examines how audit risk affects green innovation in SMEs, with digitalization and managerial ability as moderating factors. Analysis of panel data from Chinese SMEs (2011–2021) shows that audit risk negatively impacts green innovation. However, advanced digital capabilities and skilled management mitigate this effect. Our findings vary based on ownership types and industry pollution levels, offering insights for policymakers and practitioners to promote sustainable practices through risk-aware strategies.

Keywords: Audit risk; Green innovation; SMEs; Digitalization; Managerial ability; Sustainability (search for similar items in EconPapers)
JEL-codes: G32 M41 O31 Q55 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612325002429
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002429

DOI: 10.1016/j.frl.2025.106978

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().