The embedding of party organizations and green innovation of privately owned firms

Green development has become the primary development concept and an imperative development approach under the requirements of sustainable development of the global economy. Using a dataset with A-share listed firm observations from 2008 to 2021 in China, we examine the impact of Communist Party of China (CPC) organization in privately owned firms (POEs) on corporate green innovation. We find that the embedding of CPC organization promotes corporate green innovation of POEs. The results still holds after the robustness test. Mechanism analysis shows that the promotion effect of CPC organization comes from its ability to alleviate financing constraints and help enterprises to establish the concept of green development, enhancing private enterprises' ability and willingness of POEs to promote green innovation. Heterogeneity analysis shows that the promotion effect of CPC organization is more pronounced in regions with a low degree of marketization, non-heavily polluting industries and companies without individual-level political connections. While enriching the literature in the field of corporate green innovation and embedding theory, we also provide a theoretical basis and policy reference for promoting corporate green transformation and green innovation.