The impact of environmental investments on green innovation: An integration of factors that increase or decrease uncertainty

Abstract

How institutional factors that increase or decrease uncertainty can influence the effect of environmental investments (EIs) on green innovation (GI) deserves further investigation. In this study, we first examine the direct impact of EIs on GI. Moreover, we consider political uncertainty (PU) as a factor that increases uncertainty and consider marketization degree (MD) and environmental regulations (ERs) as two other factors that decrease uncertainty; then, we examine the effects of these factors on EIs and GI. Using key environmental cities in China covering the period from 2003 to 2016 as the research sample, the empirical results indicate that EIs can have a positive effect on GI and two different types of GI (green invention and green utility). In addition, PU can weaken the positive effect of EIs on GI. Furthermore, the association between EIs and GI varies with the intensity of ERs but does not vary with MD. The positive effect of EIs on GI is more pronounced in cities with a higher intensity of ERs. Overall, PU that increases uncertainty can weaken the positive effect of EIs on GI, whereas ERs that decrease uncertainty can strengthen the promotion effect of EIs on GI.

Green Innovation and Export Performance in Emerging Market Firms: A Legitimacy-based View

“…We collect data on listed companies' export sales from WIND. We obtain patent data from the Chinese Research Data Services Platform (CNRDS) to construct the measure of green innovation (Li, Xu, & Ramanathan, 2022). Information on export destinations is gathered from the General Administration of Customs of P. R. China (GAC), information on political risk is gathered from the International Country Risk Guide (ICRG) (Datta, Musteen, & Basuil, 2015), buyer sophistication is based on the Global Competitiveness Report published by the World Economic Forum 1 (Hasija et al, 2020), and China Stock Market & Accounting Research (CSMAR) is the information source for measuring state ownership.…”

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“…The degree of marketization arises from a series of economic, social, legal, and political institutional reforms. These reforms not only reflect the relationship between the government and the market in a region, but also represent the extent to which the market influences resource allocation (Li, Xu, & Ramanathan, 2022; Li, Long, et al, 2022). To test whether the degree of marketization affects the role of corporate digital transformation on ESG performance.…”

Is there a complementary or a substitutive relationship between climate governance and analyst coverage? Its effect on climate disclosure

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