Visible Hand: Do Government Subsidies Promote Green Innovation Performance – Moderating Effect of Ownership Concentration

Abstract

Enterprise green innovation is an important way to promote sustainable development of the environment. This paper focuses on the impact of government subsidies on enterprise green innovation, as well as the moderating role of ownership concentration on the relationship. Using China's data on high-tech enterprises listed in Shanghai and Shenzhen from 2011 to 2016, the hypotheses are tested. The results suggest that: government subsidies effectively improve the enterprises green innovation performance; ownership concentration displays a positively U-shaped effect in relation to green innovation; equity concentration has an inverted U-shaped moderating effect on the relationship between government subsidies and green innovation performance. Moreover, the baseline conclusions applied to SOEs do not apply to non-SOEs. Thus, an integrated framework of public supported resources and internal governance is built to improve the efficiency of government subsidies to develop green new technologies and ultimately promote the sustainability of the environment.

Institutional Pressures and Corporate Green Innovation; Empirical Evidence from Chinese Manufacturing Enterprises

“…Three main institutional pressures have been identified: regulatory pressure, normative pressure, and mimetic pressure [6]. Although these three institutional pressures have often been observed to operate at the same time, they have different green innovation moderating roles.…”

“…Because of its high risk, high investment and long return cycle characteristics, green innovation, which is considered an active response to environmental pressures, is different from passive response behaviors that only seek to meet minimum policy standards [5]. Compared with other green practices, such as green logistics, green purchasing and green marketing, green innovation requires greater financial support and usually only results in long term returns [6]. As green innovation involves the development of new products and processes to reduce or eliminate the use and generation of harmful substances, it has certain spillover effects.…”

The impact of local government debt on urban environmental pollution and its mechanism: Evidence from China

“…However, green technology usually has a long development cycle and is characterized by high cost, high risk and low profit [ 31 , 32 ]; new products adopting green technology often have higher costs and lack marketing channels. Therefore, enterprises lack the intrinsic motivation to engage in environmental innovation activities and need the support and guidance of government [ 33 – 36 ]. In the context of green development strategy, debt financing can help increase the government’s financial support for green technology research and development projects, give full play to the leverage capability of financial funds, and guide more enterprises to engage in environmental innovation activities with both economic and ecological benefits.…”

How does Outward Foreign Direct Investment Affect Enterprise Green Technology Innovation? — Based on the Moderating effect of Resources

“…Enterprise green technology innovation(Gpatent) is measured by the green patent data applied by the enterprise. According to Li et al,(2017) and Wu and Hu(2021), the green patent data were collected by screening the patents applied by the sample enterprises through the application of 14 keywords that are likely to re ect the speci c concept and meaning of green technology innovation. These keywords include environmental protection, energy saving, pollution control, water conservation, electricity saving, recycling, sustainable, clean, economical, emission reduction, green, low carbon, environmental protection and ecology.…”

“…As available internal resources of enterprises, slack resources are likely to be redeployed to promote enterprises to develop new capabilities which enable rms to be adapted to unexpected internal and external uctuations and simultaneously seize potential opportunities (Lin and Liu, 2012 Therefore, when enterprises expect to effectively seek knowledge, technology and other resources for green technology innovation through OFDI, the joint of government subsidies and slack resources is able to provide su cient support for enterprises' OFDI and consequently promote the positive correlation mechanism between OFDI and enterprises' green new technology R&D. However, the moderating effects of both government subsidies and slack resources between OFDI and green technology innovation has not been theoretically and empirically tested in the context of China (Bai et al, 2020;Yang et al,2020;Song et al,2021). Additionally, the particularity of enterprise property right attribute will lead to signi cant differences between state-owned enterprises and private enterprises in resource acquisition, internal governance and development objectives in the practice of China's enterprises (Choi et al, 2011;Aghion et al, 2013;Wu et al, 2021). Thus, this paper will give an insight into the micro-mechanism of OFDI on corporate green technology innovation based on the moderating effects of both government subsidies and slack resources in the developing context of China's enterprises.…”