The Peer Influence on Green Innovation: Evidence from Product-Similarity-Based Peer Firms in China

Qian Wang, Cheng Xiang, Zhuoyao Xin and Chunhong Li

Emerging Markets Finance and Trade, 2025, vol. 61, issue 11, 3595-3611

Abstract: We identify peers for Chinese public firms based on product similarity, referred to as TNIC peers, and explore their impact on focal firms’ green innovation and the underlying mechanisms. Our results show a positive and causal peer influence: the number of focal firms’ green innovation patents significantly increases with that of peers. This effect is stronger when focal firms face higher competition pressures or peer firms have greater information transparency. Further analysis reveals that green innovation by peer firms encourages subsequent green innovation in focal firms by reducing the technological and product market uncertainties they face. Overall, our findings suggest that both peer competition pressure and information spillover drive the observed peer influence on green innovation.

Date: 2025
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DOI: 10.1080/1540496X.2025.2479064

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