Substantive innovation or strategic catering: Capital market pressure and corporate green innovation structure

Abstract

Green innovation requires a market environment willing to take on more risk and accept failure. Capital markets are essential in green innovation because they can spread out the risks associated with innovation. Compared to existing research, this paper focuses on the impact and processes of the short-selling mechanism on corporate green technology innovation structure. Specifically, this study utilizes a difference-in-difference model to examine the effects and underlying mechanisms based on the listed firms from 2011 to 2022. The results suggest that the pressure from the capital market might encourage the development of green technological innovation in corporations. Still, it also hinders the establishment of a structure for corporate green innovation and fosters the expansion of strategic patent behavior. The influence is achieved through enhancing managerial performance, monitoring external pressures, and transmitting stock price information. Heterogeneous analysis confirms that independent directors ratio and CEO duality play a critical role. The findings demonstrate how capital market pressure can affect corporate green innovation structure, support the critical role of capital market and contribute to further engagement in corporate green technology innovation.