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Do major customers encourage innovative sustainable development? Empirical evidence from corporate green innovation in China
Author(s) -
Huang Chang,
Chang Xiao,
Wang Yang,
Li Nicolas
Publication year - 2023
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.3123
Subject(s) - marketization , business , incentive , china , green innovation , industrial organization , panel data , competition (biology) , sustainable development , green development , marketing , market economy , economics , ecology , political science , law , econometrics , biology
This paper examines the impact of customer concentration on green innovation in Chinese listed firms between 2006 and 2018 through the dynamic panel generalized method of moments regressions. It is reported that major customers positively impact corporate green innovation, indicating that firms have more incentives to engage in innovative green practices to maintain stable relationships with major customers. In addition, the positive relationship between customer concentration and green innovation is more pronounced in state‐owned enterprises, firms located in the provinces with a high level of marketization, and after China's new Environmental Protection Law implementation. Moreover, we observe that the positive impact of customer concentration on corporate green innovation is more significant among industrial firms and firms operating in heavily polluting industries. Furthermore, industrial competition is an essential channel for major customers to affect corporate green innovation.