Executive Ownership and Minority Shareholder Protection: Drivers of Environmental Innovation in China's A-Share Market

This study explores the relationship between executive ownership, minority shareholder protection, and environmental innovation in China. We conducted the study using a comprehensive sample of A-share companies listed on the Chinese Exchange Market from 2013 to 2022. The final sample consists of 29,366 observations. The results show that executive ownership significantly boosts environmental innovation, especially in low-polluting industries. However, its impact is minimal in high-polluting sectors, highlighting the necessity of external regulatory frameworks. Minority shareholder protection positively moderates this relationship, indicating its critical role in fostering environmentally beneficial strategies. Executive salary also encourages innovation but to a lesser extent than ownership, suggesting potential governance challenges with just short-term financial incentives. The research underscores the importance of policies aligning executive incentives with long-term environmental goals and strengthening minority shareholder rights for effective corporate sustainability efforts. Hence, policymakers should focus on creating policies that encourage sustainable innovation, particularly in high-polluting industries where internal governance alone may not suffice.