Can local social norms motivate green innovation: Evidence from China

Abstract

Our research suggests that the attention of local residents to environmental issues can influence green innovation by local firms. We examine the level of local attention to environmental issues (hereafter, local attention) and the number of green patents held by firms headquartered in these locations and find a positive correlation between local attention and the level of green innovation. We also find that this relationship is strengthened by local government subsidies. We provide evidence of the regulatory effect of local attention on chemical releases by local firms and demonstrate that local attention can be an effective estimator of local social norms.