Board Capital And Enterprise Green Innovation

In recent years,there has been an overall upward trend in the frequency of extreme weather and natural disasters worldwide and the economic losses they cause.Reducing environmental pollution and protecting the ecological environment have become the consensus of all countries.China’s National Development and Reform Commission,the Ministry of Science and Technology jointly issued the "on further improving the market-oriented green technology innovation system that is the implementation plan(2023-2025)" requires further strengthening the green technology innovation to green low-carbon development of the key support role.Previously,the Party’s 20 th National Congress report made deployments to "promote green development",emphasizing the need to "improve the green science and technology innovation system" and "accelerate the research and development and application of advanced energy-saving technologies".To achieve the green development goal proposed by China,both macro top design and micro foundation are needed.Enterprises are the most basic market supplying body,and also the microscopic body to carry out green innovation.How to motivate enterprises to carry out green innovation and improve the efficiency of green innovation is the key link to consolidate the micro foundation of green development.Existing researches have explored the important factors affecting green innovation from external institutional environment,internal resource capacity of enterprises and enterprise managers,and have achieved fruitful results,but there is a lack of research on corporate governance mechanism affecting green innovation.The board of directors is the core institution of corporate governance and an important strategic decision-making body.Board capital is an important factor that affects the efficiency and function of board governance,and inevitably has a significant impact on the green innovation of enterprises.Based on the above background,exploring the mechanism of board capital’s influence on corporate green innovation is an important issue that needs to be solved to stimulate the inner green innovation vitality of Chinese enterprises.Using a combination of normative and empirical research,this thesis examines the influence mechanisms of board capital on green innovation using higher-order theory,branding theory and resource dependence theory,based on a theoretical analysis framework that compares the relevant literature and defines key concepts.Subsequently,the moderating effects of board capital on the relationship between board capital and green innovation are explored at the macro and micro levels in terms of internal governance context,external governance environment,and firm characteristics.Finally,along the logic of "board capitalgreen innovation-firm performance",the thesis further examines whether board capital can improve the efficiency of green technology innovation transformation and increase the marginal contribution of green innovation to the financial and environmental performance of firms.In addition,this thesis also examines the relationship between board capital,corporate green innovation,and corporate operating performance and financial performance to reveal whether board capital will ultimately improve corporate performance through the green innovation channel.Following the above research framework,this thesis investigates the impact of board capital on green innovation through theoretical extrapolation and empirical testing by using A-share listed companies in Shanghai and Shenzhen markets in China from 2010-2019 as the research object and obtains the following research findings.First,board capital improves corporate green innovation.In this paper,board human capital is further divided into board human capital depth and board human capital width.It is found that board human capital depth,board human capital width,and board social capital all enhance the level of corporate green innovation.Second,this paper further explores the mechanism by which board capital affects corporate green innovation.The findings suggest that,firstly,board human capital promotes green innovation by inhibiting management’s short-sighted behavior and reducing the agency cost of the firm to play a supervisory effect.Second,board human capital has an absorptive effect,i.e.,it promotes green innovation by improving the absorptive capacity of firms.Third,high level of board social capital can reduce the level of financing constraint of the firm exerting resource effect to promote green innovation of the firm.Fourth,social capital of the board of directors promotes green innovation by attracting the attention of analysts and reducing the level of information asymmetry of enterprises to the outside world to play the information effect.Fourth,the study of differences based on external governance environment found that command-andcontrol environmental regulation enhanced the positive effects of board human capital depth and board social capital on green innovation.The moderating effect of command-and-control environmental regulation on the relationship between board human capital breadth and green innovation is not significant.The moderating effect of market-incentive environmental regulation on the relationship between board human capital depth,board human capital breadth and board social capital and green innovation is insignificant.Media attention enhances the positive effect of board human capital depth,board human capital breadth,and board social capital on green innovation.The degree of market competition enhances the positive moderating effect of board human capital depth,board social capital on green innovation.The moderating effect of the degree of market competition on the relationship between board human capital breadth and green innovation is not significant.Institutional investors enhance the positive effect of board human capital depth,board human capital breadth,and board social capital on Green innovation.Fifth,the study based on firm heterogeneity found that the positive effects of board human capital depth and board social capital on corporate green innovation were more significant in state-owned enterprises.The promotion effect of board human capital depth,board capital width,and board social capital on green innovation is more significant in enterprises with more redundant resources.The promotion effect of board human capital depth and board social capital on green innovation is more significant in heavy polluting enterprises.The positive effects of human capital of the board of directors and social capital of the board of directors on the generation of green innovation are more significant in enterprises in the growth and maturity stages.Sixth,the green innovation activities of enterprises include three links: green innovation input,green innovation output and practical application of green innovation results.Under the premise of the constraints of green innovation resources input,how to improve the quality and efficiency of green innovation and the transformation of green innovation results from the board capital level is an important issue that enterprises need to pay attention to.After the empirical test,it is found that the depth of board human capital,the width of board human capital,and board social capital improve the quality and efficiency of green innovation of enterprises.Meanwhile,the empirical results also confirm that board capital improves the financial performance and environmental performance of enterprises through green innovation channel.The possible innovations and contributions of this study are:First,this paper refines board capital into board human capital and board social capital from the board governance level,and explores the mechanism and economic consequences of board capital on corporate green innovation based on multiple theoretical perspectives such as branding theory,higher order theory,and resource dependence theory,which makes up for the shortcomings of existing studies and expands the research perspective on the factors influencing corporate green innovation.Secondly,this paper constructs a more complete research framework on the influence of board capital on green innovation.This study explores the impact of board capital on corporate green innovation from the perspective of the dual function of monitoring and advising.The findings confirm that board human capital improves firms’ green innovation output by enhancing their absorptive capacity and reducing agency costs through the monitoring effect.The social capital of the board of directors promotes the green innovation process by exerting information and resource effects.The board of directors is the key decision maker of major corporate strategies,and board capital is a core element that influences the key strategies that affect the board of directors and guides the successful implementation of the strategies.This study provides useful empirical references on how the board of directors can use board capital to better perform its monitoring and advising functions to promote sustainable corporate development,and also provides a new research perspective on the study of board capital influencing corporate behavioral decisions.Third,this paper incorporates various situational factors affecting the relationship between board capital and green innovation into the theoretical analysis framework to examine the moderating effects of various situational factors on the relationship between the two.This paper incorporates the external institutional environment,internal governance context,and corporate heterogeneity characteristics into the research framework of board capital and green innovation,and further explores the green innovation effect of board capital and its boundary conditions.