Institutional investors’ field research and corporate green innovation

Abstract

This study investigates the role of institutional investors' field research in promoting corporate green innovation, using panel data on Chinese listed enterprises from 2012 to 2022. Institutional investors' field research has become an increasingly important mechanism in capital markets, serving both as a key channel for acquiring firm-specific information and as an external governance tool. Empirical analysis reveals that field research significantly enhances corporate green innovation through two primary channels: by improving information transparency and easing financing constraints, thereby supporting green project funding; and by increasing media exposure, which motivates firms to improve environmental disclosures and strengthen green innovation efforts to protect their public image. Further analysis shows that this positive effect is more pronounced in firms with weak internal controls, where external monitoring helps address governance deficiencies. In addition, for heavily polluting enterprises, institutional investors’ field research plays a vital role in encouraging green innovation investment and facilitating green transition.