The Impact of Green Innovation on Corporate Performance: An Analysis Based on Substantive and Strategic Green Innovations

The Impact of Green Innovation on Corporate Performance: An Analysis Based on Substantive and Strategic Green Innovations 1 2 * Sustainability 2024 , 16 (6), 2588; https://doi.org/10.3390/su16062588 (registering DOI) Abstract : 1. Introduction 2. Literature Review and Theoretical Hypothesis 2.1. Literature Review 2.1.1. Green Innovation 2.1.2. The Impact of Green Innovation on Corporate Performance 2.2. Theoretical Hypothesis 2.2.1. Green Innovation and Financial Performance H1a. H1b. 2.2.2. Green Innovation and Environmental Performance H2a. H2b. H2c. 3. Research Design 3.1. Sample Selection 3.2. Definition of Variables 3.2.1. Dependent Variables 2 ) emissions per unit of assets to measure corporate environmental performance (EP). This is an inverse indicator, with lower values indicating lower carbon emissions and better environmental performance. We used ROE and carbon dioxide emissions per capita as alternative measures of financial performance (FP1) and environmental performance (EP1) in the robustness tests, respectively. 3.2.2. Independent Variables 3.2.3. Control Variables 3.3. Model Section i nd ) and year (μ t ) in the regression. it is the financial performance of a given company in a given year, measured as ROA; EP it is the environmental performance of a given company in a given year, measured as the carbon dioxide (CO 2 ) emissions per unit of assets; LnSubGI it is the substantive green innovation of a given company in a given year, measured as the number of green innovation patents obtained by a firm in a given year; LnStrGI it is the strategic green innovation of a given company in a given year, measured as the number of green utility model patents obtained by a firm in a given year; Controls it is the control variables, including enterprise size, fixed asset ratio, gearing ratio, research and development investment, government subsidies, and ISO14001 certification; μ ind is a dummy variable representing a given firm; and μ t is a dummy variable representing a given year of analysis. 4. Empirical Findings and Discussion 4.1. Descriptive Statistics 4.2. Results of Panel Regression 2 emissions per unit of assets and improve the environmental performance of enterprises. This finding supports H2a and H2b. On this basis, we refer to Xie and Zhu [60] to standardize the regression coefficients of column (4) to compare the relative magnitude of the promotional effects of substantive green innovation and strategic green innovation on firms’ environmental performance (for standardization, the untreated regression coefficients were multiplied by the standard deviation of that independent variable and then divided by the standard deviation of the dependent variable). After eliminating the effects of differences in magnitude and order of magnitude, the effects of substantive green innovation and strategic green innovation on environmental performance are −0.021 (−0.272 × 0.919/11.64 = −0.021) and −0.026 (−0.209 × 1.054/11.64 = −0.026), respectively. The results indicate that the extent of reduction in CO 2 emissions per unit of assets due to strategic green innovation is greater than that of substantive green innovation. Therefore, the enhancement effect of substantive green innovation on environmental performance is smaller than that of strategic green innovation. This validates H2c. The reason for this difference may be attributed to the fact that strategic green innovation can directly reduce the emissions of three wastes and, thus, have a more direct and rapid impact on environmental performance, whereas substantive green innovation can reduce the negative impacts of products on the environment during production, use and recycling, which is more indirect. 4.3. Robustness Tests 4.3.1. Controlling for Previous Period Performance 4.3.2. Different Proxy Variables 4.3.3. Retaining the Manufacturing Sample 4.3.4. Excluding the Interference Sample 4.4. Heterogeneity Analysis 4.4.1. The Heterogeneity of Firm Ownership 4.4.2. The Heterogeneity of Government Environmental Concerns 5. Research Conclusions, Insights and Limitations 5.1. Conclusions 5.2. Management and Practical Insights 5.3. Limitations and Future Research 2 emissions. Although this is the best measurement we can perform within our capacity, it may not be a comprehensive measure of environmental performance. Future research can try to broaden the scope of environmental performance measurement. Fourth, this study only focuses on green technological innovations that can be measured using green patents. It is necessary to include other types of green innovations in future studies, such as marketing, organizational, and logistic innovations. Fifth, this study only analyzed two factors that may affect the relationship between green innovation and firm performance. Future research may be able to explore better whether specific firm characteristics and environmental conditions affect the relationship between green innovation and firm performance, such as the green awareness of managers, the public’s concern for the environment, and the degree of regional intellectual property rights protection, which may be effective in moderating the relationship between the two. In conclusion, it is hoped that this study will inspire more scholars to explore the relationship between green innovation and firm performance to promote the vigorous development of research in the field of green innovation. Author Contributions Funding Institutional Review Board Statement Informed Consent Statement Data Availability Statement Acknowledgments Conflicts of Interest References Przychodzen, J.; Przychodzen, W. Relationships between eco-innovation and financial performance—Evidence from publicly traded companies in Poland and Hungary. J. Clean. Prod. 2015 , 90, 253–263. 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Fujii et al., (2013) [51]; Lee and Min (2015) [37] Annual reports of enterprises Independent variables Substantive Green Innovation (LnSubGI) The natural logarithm of the number of green invention patents authorized. Liao (2020) [57]; Jiang and Bai (2022) [33] CNRDS Strategic Green Innovation (LnStrGI) The natural logarithm of the number of green utility model patents authorized. CNRDS Control variables Enterprise size (Size) The logarithm of the total assets of the enterprise at the end of the year. Li et al., (2021) [16]; Lin et al., (2019) [25] CSMAR Fixed asset ratio (Fixed) The proportion of fixed assets to total assets. Zhang, Rong and Ji (2019) [3] CSMAR Gearing Ratio (Lev) The proportion of total liabilities to total assets. Jin and Xu (2020) [59]; Przychodzen and Przychodzen (2015) [1] CSMAR Research and development investment (R&D) The proportion of current R&D investment to operating revenue. Przychodzen, Leyva-de la Hiz and Przychodzen (2020) [22] CSMAR Government subsidies (Subsidy) The logarithm of the amount of government subsidies received by the enterprise in the year. Xie et al., (2016) [58] CSMAR ISO14001 certification (ISO14001) If the enterprise passes the ISO14001 audit in the year, the value is assigned as 1, otherwise it is 0. de Paula et al., (2020) [24]; Przychodzen and Przychodzen (2015) [1] CSMAR Variable Mean Median Skewness SD Min Max FP 3.964 3.869 −2.136 6.082 −49.27 21.84 EP 20.12 17.69 1.729 11.64 1.949 82.47 TotallGI 13.59 4 11.75 47.22 1 1075 SubGI 3.637 0 15.28 18.94 0 533 StrGI 9.958 3 11.34 33.31 0 715 LnSubGI 0.660 0 1.661 0.919 0 4.898 LnStrGI 1.539 1.386 0.817 1.054 0 5.159 Size 22.56 22.35 0.672 1.368 19.77 26.46 Fixed 22.02 18.94 0.947 14.79 0.158 72.46 Lev 44.05 43.98 0.0817 19.26 3.131 92.46 R&D 4.617 3.830 2.403 3.916 0.0200 32.26 Subsidy 17.02 16.96 −0.0282 1.518 10.82 20.75 ISO14001 0.311 0 0.815 0.463 0 1 Variable FP EP LnSubGI LnStrGI Size Fixed Lev R&D Subsidy ISO14001 FP 1 EP 0.159 *** 1 LnSubGI 0.022 ** 0.037 *** 1 LnStrGI −0.076 *** −0.004 0.424 *** 1 Size 0.002 0.277 *** 0.331 *** 0.385 *** 1 Fixed −0.090 *** 0.058 *** −0.021 ** −0.027 *** 0.238 *** 1 Lev −0.373 *** 0.130 *** 0.170 *** 0.322 *** 0.486 *** 0.138 *** 1 R&D −0.026 *** −0.267 *** 0.013 −0.071 *** −0.276 *** −0.256 *** −0.326 *** 1 Subsidy 0.023 ** 0.079 *** 0.337 *** 0.369 *** 0.649 *** 0.118 *** 0.332 *** 0.012 1 ISO14001 0.046 *** 0.063 *** −0.008 −0.011 0.025 *** 0.009 −0.023 ** 0.019 ** 0.005 1 Table 4. The impact of substantive and strategic green innovations on corporate financial and environmental performance. Variables (1) FP (2) FP (3) EP (4) EP LnSubGI 0.225 *** −0.272 *** (0.075) (0.096) LnStrGI −0.226 *** −0.292 *** (0.072) (0.092) Size 1.160 *** 0.064 1.247 *** 0.185 (0.152) (0.195) (0.154) (0.198) Fixed −0.079 *** 0.039 *** −0.080 *** 0.039 *** (0.008) (0.010) (0.008) (0.010) Lev −0.197 *** −0.006 −0.196 *** −0.006 (0.006) (0.007) (0.006) (0.007) R&D −0.675 *** −0.609 *** −0.667 *** −0.607 *** (0.029) (0.037) (0.029) (0.037) Subsidy 0.136 ** −0.551 *** 0.163 *** −0.530 *** (0.060) (0.078) (0.061) (0.078) ISO14001 −0.103 −0.341 * −0.095 −0.371 ** (0.141) (0.181) (0.141) (0.181) _cons 5.829 *** 31.427 *** 4.825 *** 30.722 *** (1.202) (1.545) (1.231) (1.581) Individual/Year yes yes yes yes N 10,940 10,940 10,940 10,940 Adj-R 2 0.477 0.766 0.478 0.767 Variables (1) FP (2) EP (3) FP1 (4) EP1 (5) FP (6) EP (7) FP (8) EP LnSubGI 0.225 *** −0.224 ** 0.629 *** −0.009 ** 0.185 ** −0.214 ** 0.300 *** −0.201 * (0.086) (0.100) (0.202) (0.004) (0.083) (0.104) (0.098) (0.114) LnStrGI −0.181 ** −0.252 ** −0.338 * −0.015 *** −0.208 *** −0.254 ** −0.302 *** −0.253 ** (0.086) (0.103) (0.195) (0.004) (0.081) (0.101) (0.089) (0.125) FP t−1 0.038 *** (0.014) EP t−1 0.332 *** (0.012) Size 1.231 *** −0.205 4.802 *** 0.055 *** 1.040 *** 0.561 *** 1.217 *** −0.811 *** (0.214) (0.243) (0.419) (0.009) (0.174) (0.217) (0.198) (0.253) Fixed −0.093 *** 0.056 *** −0.139 *** 0.002 *** −0.095 *** 0.033 *** −0.081 *** 0.024 * (0.011) (0.013) (0.022) (0.000) (0.009) (0.011) (0.010) (0.013) Lev −0.208 *** −0.016 * −0.439 *** −0.001 *** −0.189 *** −0.007 −0.197 *** −0.002 (0.008) (0.009) (0.016) (0.000) (0.006) (0.008) (0.007) (0.009) R&D −0.726 *** −0.559 *** −1.438 *** −0.040 *** −0.663 *** −0.582 *** −0.674 *** −0.618 *** (0.040) (0.045) (0.079) (0.002) (0.031) (0.038) (0.037) (0.048) Subsidy 0.286 *** −0.306 *** 0.265 −0.020 *** 0.234 *** −0.437 *** 0.157 ** −0.448 *** (0.078) (0.089) (0.165) (0.004) (0.071) (0.088) (0.072) (0.091) ISO14001 −0.107 −0.493 ** −0.129 −0.021 *** −0.074 −0.489 ** 0.136 −0.304 (0.175) (0.198) (0.382) (0.008) (0.154) (0.193) (0.176) (0.224) _cons 3.696 ** 23.126 *** −7.906 ** 2.957 *** 5.449 *** 26.809 *** 5.086 *** 37.402 *** (1.747) (1.997) (3.331) (0.073) (1.367) (1.706) (1.615) (2.061) Individual/Year yes yes yes yes yes yes yes yes N 7388 7388 10,934 10,940 9323 9323 8215 8215 Adj-R 2 0.495 0.813 0.303 0.784 0.481 0.767 0.597 0.841 Variables (1) FP (2) EP (3) FP (4) EP LnSubGI 0.437 *** −0.058 0.617 ** 0.151 (0.098) (0.126) (0.249) (0.320) LnStrGI −0.313 *** −0.165 −0.130 0.198 (0.090) (0.115) (0.216) (0.277) LnSubGI × SOE −0.505 *** −0.468 ** (0.147) (0.189) LnStrGI × SOE 0.240 * −0.306 * (0.138) (0.177) LnSubGI × GEC −0.440 * −0.351 (0.248) (0.318) LnStrGI × GEC −0.097 −0.532 * (0.217) (0.279) SOE −0.871 * 1.167 * (0.473) (0.608) GEC 1.197 *** −0.136 (0.394) (0.506) Size 1.261 *** 0.182 1.235 *** 0.196 (0.154) (0.198) (0.155) (0.198) Fixed −0.080 *** 0.038 *** −0.081 *** 0.040 *** (0.008) (0.010) (0.008) (0.010) Lev −0.195 *** −0.007 −0.195 *** −0.006 (0.006) (0.007) (0.006) (0.007) R&D −0.668 *** −0.611 *** −0.661 *** −0.611 *** (0.029) (0.037) (0.029) (0.037) Subsidy 0.168 *** −0.528 *** 0.174 *** −0.552 *** (0.061) (0.078) (0.061) (0.078) ISO14001 −0.081 −0.382 ** −0.090 −0.360 ** (0.141) (0.181) (0.141) (0.180) _cons 4.903 *** 30.254 *** 3.593 *** 30.964 *** (1.231) (1.581) (1.280) (1.643) Individual/Year yes yes yes yes N 10,940 10,940 10,936 10,936 Adj-R 2 0.500 0.770 0.573 0.809 Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of MDPI and/or the editor(s). 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Liu, M.; Liu, L.; Feng, A.
The Impact of Green Innovation on Corporate Performance: An Analysis Based on Substantive and Strategic Green Innovations. Sustainability 2024 , 16 , 2588.
https://doi.org/10.3390/su16062588
AMA Style
Liu M, Liu L, Feng A.
The Impact of Green Innovation on Corporate Performance: An Analysis Based on Substantive and Strategic Green Innovations. Sustainability . 2024; 16(6):2588.
https://doi.org/10.3390/su16062588
Chicago/Turabian Style
Liu, Mingxia, Liqian Liu, and Amei Feng.
2024. “The Impact of Green Innovation on Corporate Performance: An Analysis Based on Substantive and Strategic Green Innovations” Sustainability 16, no. 6: 2588.
https://doi.org/10.3390/su16062588