Environmental Practices, Digitalization, and Green Innovation in Multinational Firms

Abstract

This study examines the diverse environmental practices of multinational firms, the degree of digitalization among parent firms, and green innovation. Using data from multinational listed firms from 2007 to 2018 as a sample, this article uses regression analysis to show that the more widely distributed the subsidiaries of multinational firms, the more heterogeneous the environmental knowledge acquired by the parent firm. The more diverse the environmental practices, the worse the green innovation performance of the parent firm. The degree of digitalization of the parent firm can effectively mitigate this negative effect. The more digital the parent company is, the more quickly it can process the large amount of complex information that helps the parent firm to achieve green innovation. These findings provide a new perspective on innovation in firms.