This paper introduces a moderated-mediation model to investigate the relationship between green innovation, as measured by green patent stocks, and firms' stock market value, as measured by Tobin's Q. Using longitudinal data drawn from 351 heavily polluting firms in China's A-share market from 2007 to 2018, we find that green innovation is likely to affect firms' stock market value positively. A 1% increase in the green innovation over assets index will enhance by 0.18% the Tobin's Q at the firm level. Environmental compliance costs significantly mediate the green innovation- firms' stock market value association by 8.5%. We also emphasize the positive moderating role of technological collaboration with public research organizations on green innovation-environmental compliance costs linkage. Our results emphasize that the recurrent question in the extant literature “does it pay to be green?” should be substituted by “how and under what conditions does it pay to be green for firms?” and further stress how firms obtain sustainable development in the environment and economy through green innovation. Implications for firms and investors are also proposed.

Green innovation and the stock market value of heavily polluting firms. The role of environmental compliance costs and technological collaboration / Tian, Jinhuan; Dong, Yan; Vagnani, Gianluca; Liu, Peizhong. - In: BUSINESS STRATEGY AND THE ENVIRONMENT. - ISSN 0964-4733. - 32:7(2023), pp. 1-16.

Green innovation and the stock market value of heavily polluting firms. The role of environmental compliance costs and technological collaboration

Gianluca Vagnani
;
2023

Abstract

This paper introduces a moderated-mediation model to investigate the relationship between green innovation, as measured by green patent stocks, and firms' stock market value, as measured by Tobin's Q. Using longitudinal data drawn from 351 heavily polluting firms in China's A-share market from 2007 to 2018, we find that green innovation is likely to affect firms' stock market value positively. A 1% increase in the green innovation over assets index will enhance by 0.18% the Tobin's Q at the firm level. Environmental compliance costs significantly mediate the green innovation- firms' stock market value association by 8.5%. We also emphasize the positive moderating role of technological collaboration with public research organizations on green innovation-environmental compliance costs linkage. Our results emphasize that the recurrent question in the extant literature “does it pay to be green?” should be substituted by “how and under what conditions does it pay to be green for firms?” and further stress how firms obtain sustainable development in the environment and economy through green innovation. Implications for firms and investors are also proposed.
2023
environmental compliance costs; green innovation; heavily polluting industries; sustainable development; technological collaboration; Tobin's Q
01 Pubblicazione su rivista::01a Articolo in rivista
Green innovation and the stock market value of heavily polluting firms. The role of environmental compliance costs and technological collaboration / Tian, Jinhuan; Dong, Yan; Vagnani, Gianluca; Liu, Peizhong. - In: BUSINESS STRATEGY AND THE ENVIRONMENT. - ISSN 0964-4733. - 32:7(2023), pp. 1-16.
File allegati a questo prodotto
File Dimensione Formato  
Vagnani_Green-innovation-stock_2023.pdf

accesso aperto

Tipologia: Versione editoriale (versione pubblicata con il layout dell'editore)
Licenza: Creative commons
Dimensione 1.61 MB
Formato Adobe PDF
1.61 MB Adobe PDF

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/1674383
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 2
  • ???jsp.display-item.citation.isi??? 1
social impact