CORPORATE GOVERNANCE AND GREEN INNOVATION: EVIDENCE FROM CHINESE LISTED COMPANIES

Abstract

This research paper empirically investigates the influence of corporate governance on internal innovation, with a particular focus on green innovation (GI). Drawing from the perspective of internal governance mechanisms, the study examines the effects of equity checks and balances (EB), executive incentives (EI), board size (BS), and board independence (BI) on corporate green innovation. Utilizing unbalanced panel data from Chinese A-share listed companies spanning 2008 to 2022, the analysis employs a two-way fixed effects regression model. The research methodology and variable selection are informed by the frameworks of Nageri and Gunu (2020) and Zhao et al (2023). The empirical results reveal that EB, EI, and BS exert significantly positive effects on GI, whereas BI shows no statistically significant relationship. The originality of this study lies in its comprehensive analysis of how internal governance structures systematically shape green innovation outcomes. By constructing an integrated analytical framework, this study contributes to the theoretical understanding of corporate green innovation drivers. Moreover, the findings offer valuable insights for both policymakers and corporate leaders, particularly under the strategic imperative of “dual carbon” goals, highlighting the importance of optimizing internal governance to strengthen long-term innovation capacity and competitive advantage.