China’s economic development has entered a new normal,and abandoning the brutal development method so as to achieve the unity of economic development and ecological protection is an inevitable requirement for the current transformation of the development mode to achieve high-quality development.To break through the outstanding problems of resource shortage and environmental pollution faced by highquality development,the 20 th Party’s National Congress once again emphasized adhering to the idea of green development and continuing to implement the green development strategy.As the main body of pollution emission,the production and operation activities of manufacturing enterprises are the main causes of environmental problems.Green innovation not only enables enterprises to obtain long-term core competitiveness,but also can help realize economic transformation and green sustainable development,which is an important way to realize the unity of environmental and economic benefits.However,because green innovation is characterized by large investment capital,high difficulty,high technology,long cycle time and high risk,how to better drive green innovation in enterprises is a hot issue of current scholars’ concern.The smooth promotion of green innovation activities of enterprises requires not only the promotion of external factors such as policy support and legal protection,but also,more importantly,the support and guarantee of the internal system of enterprises.High-quality internal controls can mitigate agency conflicts and manage corporate risks at reasonable levels,but little literature has examined the relationship between the two.Therefore,this paper is different from the previous research perspectives of positive and quantitative internal control quality.Starting from the negative and degree perspectives of internal control,and taking into account the effect of continuous improvement of internal control under the dynamic behavior of internal control defect repair,this paper explores the influence of defects and their repair on green innovation in manufacturing industry,in order to find out the economic consequences of negative internal control perspective and the continuous influence of dynamic perspective.This paper takes listed companies in manufacturing industries in Shanghai and Shenzhen stock markets from 2009 to 2020 as the research sample.Firstly,to examine what relationship exists between internal control deficiencies and green innovation from a negative perspective.Secondly,to examine the dynamic economic consequences of fixing internal control deficiencies on an ongoing basis and to explore whether the level of green innovation of enterprises has changed before and after repair of internal control defects.Thirdly,combined with the current external environment and background of digital economy,this paper explores the difference of influence of internal control defects on green innovation under different development levels of digital economy.Finally,the paper studies the effect path of internal control defects on enterprise green innovation.This paper draws the following conclusions: compared with enterprises without internal control defects,enterprises with internal control defects have a lower level of green innovation.The conclusions are still valid after the robustness tests such as redefining variables,studying sample tests and endogeneity tests.After the internal control defects are repaired,the green innovation of enterprises can be improved.The moderating effect of digital economy shows that the level of digital economy has a negative moderating effect between internal control defects and green innovation,that is,the inhibiting effect of internal control defects on green innovation is weakened in regions with better development of digital economy.Based on the path of action test,it is found that the existence of internal control deficiencies brings about a tendency for executives to be short-sighted and to focus on personal selfinterest more than long-term corporate development.The two paths of ignoring corporate social responsibility and increasing the degree of corporate financing constraints lead to the low level of corporate green innovation.The inhibitory effect of internal control defects on green innovation output of manufacturing enterprises is more significant in non-heavy polluting industries and non-state-owned enterprises.The research value of this paper lies in:(1)Expand the relevant research on the influencing factors of enterprise green innovation.Recently,most studies focus on the external factors that affect green innovation,such as environmental regulation,government subsidies,stakeholder pressure,media attention and so on.This paper starts from the negative perspective of internal control defects as an internal governance system arrangement,and also focuses on the dynamic economic consequences after the repair of internal control defects,and systematically analyzes its sustainable impact on green innovation of manufacturing enterprises.This paper provides a reference for improving the level of green innovation in manufacturing enterprises to help China’s economy achieve green transformation and high-quality development.(2)Enrich the literature in the field of internal control.This paper further deepens the research related to the economic consequences of internal control,at the same time provides practical enlightenment that the development level of digital economy in different regions has different effects on internal control.It provides new evidence for strengthening the construction of internal control management in different regions,making internal control escort the long-term development of enterprises,and promoting enterprises to make reasonable behavior decisions. |