OpenLB
Open Library of Bioscience
Advanced Search
Environmental science and pollution research international
Feb, 2022;29 (10): 14856-14870.

Can environmental awards stimulate corporate green technology innovation? Evidence from Chinese listed companies.

Huisu Lai, Fengying Wang, Chong Guo
Author Information
  1. Huisu Lai: School of Public Administration, Hohai University, Nanjing, 210098, People's Republic of China.
  2. Fengying Wang: MBA School, Zhejiang Gongshang University, Hangzhou, 310018, People's Republic of China. 670030179@qq.com.
  3. Chong Guo: School of Economics and Management, Southeast University, Nanjing, 211100, People's Republic of China. guochong006626@163.com. ORCID
PMID: 34622406 DOI: 10.1007/s11356-021-16632-1

Abstract

Based on the environmental awards granted by credible third parties to recognize firms' devotion to environmental protection, this study examines the impact of environmental awards on firms' green technology innovation by using a data sample comprising Chinese A-shares listed firms for a period of 2007 to 2019. Our results show that environmental awards can significantly promote corporate green technology innovation. This finding remains valid after endogenous and robustness testing, including the alternative measure of green technology innovation, and the replacement of the estimation method with the Poisson regression and the negative binomial regression. Additional tests reveal that this influence is exerted through increased long-term loans and government environmental subsidies. Moreover, our study reveals that this effect only exists among non-state-owned enterprises, companies with high financial risk, and heavily polluting enterprises. Compared to extensive studies on how environmental regulation forces companies to conduct green technology innovation, this study provides essential guidance on the role played by positive incentives in driving corporate green technology innovation from the perspective of environmental awards.

Keywords

Environmental awards Government environmental subsidies Green technology innovation Long-term loans

References

  1. Acemoglu D, Aghion P, Bursztyn L, Hemous D (2012) The environment and directed technical change. Am Econ Rev 102(1):131–166. https://doi.org/10.1257/aer.102.1.131 [DOI: 10.1257/aer.102.1.131]
  2. Altman EI (1968) Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. J Finance 23:589–609. https://doi.org/10.1111/j.1540-6261.1968.tb00843.x [DOI: 10.1111/j.1540-6261.1968.tb00843.x]
  3. Almus M, Czarnitzki D (2003) The effects of public R&D subsidies on firms’ innovation activities: the case of Eastern Germany. J Bus Econ Stat 21(2):226–236. https://doi.org/10.1198/073500103288618918 [DOI: 10.1198/073500103288618918]
  4. Bai JH (2011) Is Chinese government R&D funding effective? Empirical evidence from large and medium-sized industrial enterprises. Economics (Quarterly). 29(4):1375–1400 (in Chinese)
  5. Bai Y, Song S, Jiao J, Yang R (2019) The impacts of government R&D subsidies on green innovation: evidence from Chinese energy-intensive firms. J Clean Prod 233:819–829. https://doi.org/10.1016/j.jclepro.2019.06.107 [DOI: 10.1016/j.jclepro.2019.06.107]
  6. Ben-Amar W, Chang M, McIlkenny P (2017) Board gender diversity and corporate response to sustainability initiatives: evidence from the carbon disclosure project. J Bus Ethics 142(2):369–383. https://doi.org/10.1007/s10551-015-2759-1 [DOI: 10.1007/s10551-015-2759-1]
  7. Ben Arfi W, Hikkerova L, Sahut JM (2018) External knowledge sources, green innovation and performance. Technol Forecast Soc Change 129:210–220. https://doi.org/10.1016/j.techfore.2017.09.017 [DOI: 10.1016/j.techfore.2017.09.017]
  8. Botosan CA (1997) Disclosure level and the cost of equity capital. Account Rev 72(3):323–349
  9. Boyer M, Laffont JJ (1997) Environmental risks and bank liability. Eur Econ Rev 41(8):1427–1459. https://doi.org/10.1016/S0014-2921(96)00034-7 [DOI: 10.1016/S0014-2921(96)00034-7]
  10. Brunnermeier SB, Cohen MA (2003) Determinants of environmental innovation in US manufacturing industries. J Environ Econ Manage 45(2):278–293. https://doi.org/10.1016/S0095-0696(02)00058-X [DOI: 10.1016/S0095-0696(02)00058-X]
  11. Cai W, Li G (2018) The drivers of eco-innovation and its impact on performance: evidence from China. J Clean Prod 176:110–118. https://doi.org/10.1016/j.jclepro.2017.12.109 [DOI: 10.1016/j.jclepro.2017.12.109]
  12. Cai X, Zhu B, Zhang H, Li L, Xie M (2020) Can direct environmental regulation promote green technology innovation in heavily polluting industries? Evidence from Chinese listed companies. Sci Total Environ. 746:140810. https://doi.org/10.1016/j.scitotenv.2020.140810 [DOI: 10.1016/j.scitotenv.2020.140810]
  13. Chen Y, Hung M, Wang Y (2018) The effect of mandatory CSR disclosure on firm profitability and social externalities: evidence from China. J Account Econ 65(1):169–190. https://doi.org/10.1016/j.jacceco.2017.11.009 [DOI: 10.1016/j.jacceco.2017.11.009]
  14. Cho CH, Patten DM (2007) The role of environmental disclosures as tools of legitimacy: a research note. Accounting, Organ Soc 32(7–8):639–647. https://doi.org/10.1016/j.aos.2006.09.009 [DOI: 10.1016/j.aos.2006.09.009]
  15. Cuerva MC, Triguero-Cano A, Corcoles D (2014) Drivers of green and non-green innovation: empirical evidence in Low-Tech SMEs. J Clean Prod 68(2):104–113. https://doi.org/10.1016/j.jclepro.2013.10.049 [DOI: 10.1016/j.jclepro.2013.10.049]
  16. Dasgupta S, Laplante B, Mamingi N (2001) Pollution and capital markets in developing countries. J Environ Econ Manage 42:310–335. https://doi.org/10.1006/jeem.2000.1161 [DOI: 10.1006/jeem.2000.1161]
  17. Dhaliwal DS, Radhakrishnan S, Tsang A, Yang YG (2012) Nonfinancial disclosure and analyst forecast accuracy: international evidence on corporate social responsibility disclosure. Account Rev 87(3):723–759. https://doi.org/10.2308/accr-10218 [DOI: 10.2308/accr-10218]
  18. Fang Z, Kong X, Sensoy A, Cui X, Cheng F (2021) Government’s awareness of environmental protection and corporate green innovation: a natural experiment from the new environmental protection law in China. Econ Anal Policy 70:294–312. https://doi.org/10.1016/j.eap.2021.03.003 [DOI: 10.1016/j.eap.2021.03.003]
  19. Flammer C (2013) Corporate social responsibility and shareholder reaction: the environmental awareness of investors. Acad Manag J 56(3):758–781. https://doi.org/10.5465/amj.2011.0744 [DOI: 10.5465/amj.2011.0744]
  20. Gray WB, Shadbegian RJ (2003) Plant vintage, technology, and environmental regulation. J Environ Econ Manag 46(3):384–402. https://doi.org/10.1016/S0095-0696(03)00031-7 [DOI: 10.1016/S0095-0696(03)00031-7]
  21. Hamilton SF, Zilberman D (2006) Green markets, eco-certification, and equilibrium fraud. J Environ Econ Manage 52(3):627–644. https://doi.org/10.1016/j.jeem.2006.05.002 [DOI: 10.1016/j.jeem.2006.05.002]
  22. Hassan A, Ibrahim E (2012) Corporate environmental information disclosure: Factors influencing companies’ success in attaining environmental awards. Corp Soc Responsib Environ Manag 19(1):32–46. https://doi.org/10.1002/csr.278 [DOI: 10.1002/csr.278]
  23. He K, Chen W, Zhang L (2021) Senior management’s academic experience and corporate green innovation. Technol Forecast Soc Change 166:120664. https://doi.org/10.1016/j.techfore.2021.120664 [DOI: 10.1016/j.techfore.2021.120664]
  24. Hu G, Wang X, Wang Y (2021) Can the green credit policy stimulate green innovation in heavily polluting enterprises? Evidence from a quasi-natural experiment in China. Energy Econ 98:105134. https://doi.org/10.1016/j.eneco.2021.105134 [DOI: 10.1016/j.eneco.2021.105134]
  25. Huang M, Li M, Liao Z (2021) Do politically connected CEOs promote Chinese listed industrial firms’ green innovation? The mediating role of external governance environments. J Clean Prod 278:123634. https://doi.org/10.1016/j.jclepro.2020.123634 [DOI: 10.1016/j.jclepro.2020.123634]
  26. Huang Z, Liao G, Li Z (2019) Loaning scale and government subsidy for promoting green innovation. Technol Forecast Soc Change 144:148–156. https://doi.org/10.1016/j.techfore.2019.04.023 [DOI: 10.1016/j.techfore.2019.04.023]
  27. Ioannou I, Serafeim G (2010) What drives corporate social performance? International evidence from social, environmental and governance sources. Harvard Business School: Unpublished working paper.
  28. Jacobs BW, Singhal VR, Subramanian R (2010) An empirical investigation of environmental performance and the market value of the firm. J Oper Manag 28:430–441. https://doi.org/10.1016/j.jom.2010.01.001 [DOI: 10.1016/j.jom.2010.01.001]
  29. Klassen RD, McLaughlin CP (1996) The impact of environmental management on firm performance. Manage Sci 42(8):1199–1214. https://doi.org/10.1287/mnsc.42.8.1199 [DOI: 10.1287/mnsc.42.8.1199]
  30. Lambertini L, Poyago-Theotoky J, Tampieri A (2017) Cournot competition and “green” innovation: an inverted-U relationship. Energy Econ 68:116–123. https://doi.org/10.1016/j.eneco.2017.09.022 [DOI: 10.1016/j.eneco.2017.09.022]
  31. Lee E, Walker M, Zeng C (2017) Do Chinese state subsidies affect voluntary corporate social responsibility disclosure? J Account Public Policy 36(3):179–200. https://doi.org/10.1016/j.jaccpubpol.2017.03.004 [DOI: 10.1016/j.jaccpubpol.2017.03.004]
  32. Li B, Walder AG (2001) Career advancement as party patronage: sponsored mobility into the Chinese administrative elite, 1949-1996. Am J Sociol 106(5):1371–1408. https://doi.org/10.1086/320816 [DOI: 10.1086/320816]
  33. Li D, Zhao Y, Zhang L, Chen X, Cao C (2018) Impact of quality management on green innovation. J Clean Prod 170:462–470. https://doi.org/10.1016/j.jclepro.2017.09.158 [DOI: 10.1016/j.jclepro.2017.09.158]
  34. Li J, Shan Y, Tian G, Hao X (2020) Labor cost, government intervention, and corporate innovation: evidence from China. J Corp Financ 64:101668. https://doi.org/10.1016/j.jcorpfin.2020.101668 [DOI: 10.1016/j.jcorpfin.2020.101668]
  35. Li Q, Xiao Z (2020) Heterogeneous environmental regulation tools and green innovation incentives: evidence from green patents of listed companies. Economic Research Journal 55(9):192–208 (in Chinese)
  36. Li Z, Wang P, Wu T (2021) Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China. J Bus Financ Account 48:338–373. https://doi.org/10.1111/jbfa.12481 [DOI: 10.1111/jbfa.12481]
  37. Lian T, Ma T, Cao J, Wu Y (2016) The effects of environmental regulation on the industrial location of China’s manufacturing. Nat. Hazards 80(2):1381–1403. https://doi.org/10.1007/s11069-015-2008-z [DOI: 10.1007/s11069-015-2008-z]
  38. Lin H, Zeng S, Ma H, Qi G, Tam VWY (2014) Can political capital drive corporate green innovation? Lessons from China. J Clean Prod 64:63–72. https://doi.org/10.1016/j.jclepro.2013.07.046 [DOI: 10.1016/j.jclepro.2013.07.046]
  39. Liu J, Zhao M, Wang Y (2020) Impacts of government subsidies and environmental regulations on green process innovation: A nonlinear approach. Technol Soc 63:101417. https://doi.org/10.1016/j.techsoc.2020.101417 [DOI: 10.1016/j.techsoc.2020.101417]
  40. Liu X, Anbumozhi V (2009) Determinant factors of corporate environmental information disclosure: an empirical study of Chinese listed companies. J Clean Prod 17:593–600. https://doi.org/10.1016/j.jclepro.2008.10.001 [DOI: 10.1016/j.jclepro.2008.10.001]
  41. Marzucchi A, Montresor S (2017) Forms of knowledge and eco-innovation modes: Evidence from Spanish manufacturing firms. Ecol Econ 131:208–211. https://doi.org/10.1016/j.ecolecon.2016.08.032 [DOI: 10.1016/j.ecolecon.2016.08.032]
  42. Plumlee M, Brown D, Hayes RM, Marshall RS (2015) Voluntary environmental disclosure quality and firm value: Further evidence. J Account Public Policy 34(4):336–361. https://doi.org/10.1016/j.jaccpubpol.2015.04.004 [DOI: 10.1016/j.jaccpubpol.2015.04.004]
  43. Porter ME, Van Der Linde C (1995) Toward a new conception of the environment-competitiveness relationship. J Econ Perspect 9(4):97–118. https://doi.org/10.1257/jep.9.4.97 [DOI: 10.1257/jep.9.4.97]
  44. Qi G, Jia Y, Zou H (2021) Is institutional pressure the mother of green innovation? Examining the moderating effect of absorptive capacity. J Clean Prod 278:123957. https://doi.org/10.1016/j.jclepro.2020.123957 [DOI: 10.1016/j.jclepro.2020.123957]
  45. Ramanathan R, Ramanathan U, Bentley Y (2018) The debate on flexibility of environmental regulations, innovation capabilities and financial performance – A novel use of DEA. Omega (United Kingdom) 75:131–138. https://doi.org/10.1016/j.omega.2017.02.006 [DOI: 10.1016/j.omega.2017.02.006]
  46. Rennings K (2000) Redefining innovation - Eco-innovation research and the contribution from ecological economics. Ecol Econ 32(2):319–332. https://doi.org/10.1016/S0921-8009(99)00112-3 [DOI: 10.1016/S0921-8009(99)00112-3]
  47. Requate T (2005) Dynamic incentives by environmental policy instruments - a survey. Ecol Econ 54:175–195. https://doi.org/10.1016/j.ecolecon.2004.12.028 [DOI: 10.1016/j.ecolecon.2004.12.028]
  48. Song M, Wang S, Zhang H (2020) Could environmental regulation and R&D tax incentives affect green product innovation? J Clean Prod 258:120849. https://doi.org/10.1016/j.jclepro.2020.120849 [DOI: 10.1016/j.jclepro.2020.120849]
  49. Song M, Zheng W, Wang S (2017) Measuring green technology progress in large-scale thermoelectric enterprises based on Malmquist–Luenberger life cycle assessment. Resour Conserv Recycl 122:261–269. https://doi.org/10.1016/j.resconrec.2017.03.001 [DOI: 10.1016/j.resconrec.2017.03.001]
  50. Teng MJ, Wu SY, Chou SJH (2014) Environmental commitment and economic performance - short-term pain for long-term gain. Environ Policy Gov 24(1):16–27. https://doi.org/10.1002/eet.1634 [DOI: 10.1002/eet.1634]
  51. Tether BS (2002) Who co-operates for innovation, and why an empirical analysis. Res Policy 31(6):947–967. https://doi.org/10.1016/S0048-7333(01)00172-X [DOI: 10.1016/S0048-7333(01)00172-X]
  52. Thompson P, Cowton CJ (2004) Bringing the environment into bank lending: Implication for environmental reporting. Br Account Rev 36(2):197–219. https://doi.org/10.1016/j.bar.2003.11.005 [DOI: 10.1016/j.bar.2003.11.005]
  53. Usman M, Javed M, Yin J (2020) Board internationalization and green innovation. Econ Lett 197:109625. https://doi.org/10.1016/j.econlet.2020.109625 [DOI: 10.1016/j.econlet.2020.109625]
  54. Wang W, Zhang C (2018) Evaluation of relative technological innovation capability: model and case study for China’s coal mine. Resour Policy 58:144–149. https://doi.org/10.1016/j.resourpol.2018.04.008 [DOI: 10.1016/j.resourpol.2018.04.008]
  55. Wang Y, Yu L (2021) Can the current environmental tax rate promote green technology innovation? - evidence from China’s resource-based industries. J Clean Prod 278:123443. https://doi.org/10.1016/j.jclepro.2020.123443 [DOI: 10.1016/j.jclepro.2020.123443]
  56. Wang Y, Zhi Q (2016) The role of green finance in environmental protection: two aspects of market mechanism and policies. Energy Procedia 104:311–316. https://doi.org/10.1016/j.egypro.2016.12.053 [DOI: 10.1016/j.egypro.2016.12.053]
  57. Wang Z (2017) Firm visibility and voluntary environmental behavior: evidence from hydraulic fracturing. Land Econ 93(4):654–666. https://doi.org/10.3368/le.93.4.654 [DOI: 10.3368/le.93.4.654]
  58. Xiang X, Liu C, Yang M, Zhao X (2020) Confession or justification: the effects of environmental disclosure on corporate green innovation in China. Corp Soc Responsib Environ Manag 27:2735–2750. https://doi.org/10.1002/csr.1998 [DOI: 10.1002/csr.1998]
  59. Xie J, Nozawa W, Yagi M, Fujii H, Managi S (2019) Do environmental, social, and governance activities improve corporate financial performance? Bus Strateg Environ 28(2):286–300. https://doi.org/10.1002/bse.2224 [DOI: 10.1002/bse.2224]
  60. Xu L, Fan M, Yang L, Shao S (2021) Heterogeneous green innovations and carbon emission performance: evidence at China's city level. Energ Econ 99:105269. https://doi.org/10.1016/j.eneco.2021.105269 [DOI: 10.1016/j.eneco.2021.105269]
  61. Yu C, Wu X, Zhang D, Chen S, Zhao (2021a) Demand for green finance: resolving financing constraints on green innovation in China. Energy Policy 153:112255. https://doi.org/10.1016/j.enpol.2021.112255 [DOI: 10.1016/j.enpol.2021.112255]
  62. Yu J, Shi X, Guo D, Yang L (2021b) Economic policy uncertainty (EPU) and firm carbon emissions: evidence using a China provincial EPU index. Energy Econ 94:105071. https://doi.org/10.1016/j.eneco.2020.105071 [DOI: 10.1016/j.eneco.2020.105071]
  63. Zhang W, Li G (2020) Environmental decentralization, environmental protection investment, and green technology innovation. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-020-09849-z
  64. Zheng Y, Ge C, Li X, Yu T (2020) Configurational analysis of environmental information disclosure: evidence from China’s key pollutant-discharge listed companies. J Environ Manage 270:110671. https://doi.org/10.1016/j.jenvman.2020.110671 [DOI: 10.1016/j.jenvman.2020.110671]

Grants

  1. KYCX21_0432/Postgraduate Research and Innovation Program of Jiangsu Province

MeSH Term

Awards and Prizes
China
Conservation of Natural Resources
Inventions
Organizations
Journal Article

Word Cloud

Created with Highcharts 10.0.0environmentaltechnologyawardsgreeninnovationstudycorporatecompaniesfirms'ChineselistedregressionloanssubsidiesenterprisesBasedgrantedcrediblethirdpartiesrecognizedevotionprotectionexaminesimpactusingdatasamplecomprisingA-sharesfirmsperiod20072019resultsshowcansignificantlypromotefindingremainsvalidendogenousrobustnesstestingincludingalternativemeasurereplacementestimationmethodPoissonnegativebinomialAdditionaltestsrevealinfluenceexertedincreasedlong-termgovernmentMoreoverrevealseffectexistsamongnon-state-ownedhighfinancialriskheavilypollutingComparedextensivestudiesregulationforcesconductprovidesessentialguidanceroleplayedpositiveincentivesdrivingperspectiveCanstimulateinnovation?EvidenceEnvironmentalGovernmentGreenLong-term

Similar Articles

Cited By