Abstract
In this study, we examine the green innovation effect of investor preference on Chinese listed companies from 2008 to 2020. We observe that investors with environmental protection preferences can significantly increase enterprise green innovation. The baseline conclusions remain robust after we conduct multiple sensitivity tests, such as establishing a shift-share instrumental variable (Bartik IV), using the Heckman’s two-step method, changing the regression methods, substituting the core variables, adopting the DID method, and considering investors’ ownership. Our analysis shows that the green innovation effect of environmental investors is highly pronounced in companies with a high level of indebtedness and low managerial ability. We verify that environmental investors can improve the green innovation level of enterprises through two potential mechanisms, namely, easing corporate financing constraints and incentivising managers. In addition, political and public attention can strengthen the positive relationship between environmental investors and green innovation.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 contains and , and we centralise but cannot centralise , because is a dummy variable.
2 The environmental keywords searched by the public in Baidu that we selected and translated into English include ‘SO2’, ‘environmental protection’, ‘environmental pollution’, ‘green’, ‘green land’, ‘green coverage’, ‘discharge pollution’, ‘clean energy’, ‘ecology’, ‘greenhouse effect’, ‘sewage’, and ‘circulation’.
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Notes on contributors
Zhongfei Chen
Zhongfei Chen is full Professor of Economics at Jinan University. His research interests include Financial Economics and Environmental Economics. He has conducted research and published widely in peer-reviewed journals, including Global Environmental Change, Journal of International Money and Finance, European Journal of Finance, Journal of International Financial Markets, Institutions and Money and etc.
Wenbin Zuo
Wenbin Zuo is a PhD candidate in economics at Jinan University. Her research interests involve Green Finance and Urban Economics.
Guanxia Xie
Guanxia Xie, a faculty member at Guangdong University of Finance, holds a Ph.D. in Economics. Her research focuses on ESG and Corporate Finance. Her papers have been published in journals such as International Review of Financial Analysis and Environmental Science and Pollution Research.