Local Environmental Officials Change and Corporate Green Innovation
DOI:
https://doi.org/10.54097/hbem.v9i.7836Keywords:
Corporate Green Innovation; Local Environmental Officials Change.Abstract
This paper analyzes the impact of environmental policy uncertainty caused by changes in local environmental officials on firms' green innovation within the theoretical framework of political cycle theory and promotion tournaments, and the impact of changes in local officials on firms' incentives to innovate by internalizing firms' environmental externality costs through two policy instruments: environmental regulations and environmental subsidies. On the other hand, subsidies are provided to firms for green innovation. On this basis, this paper tests the above theoretical analysis with a sample of A-share listed companies in China from 2010 to 2020. The study finds that the change of local environmental officials has a significant positive impact on corporate green innovation, and the positive impact is achieved by increasing environmental regulations and subsidies after the change of local environmental officials. In terms of heterogeneity, the change in local environmental officials has a positive effect on green innovation in non-state owned, non-eastern, and close regulatory proximity firms.
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