Environmental Risk and Green Innovation: Evidence From Evacuation Spills

51 Pages Posted: 1 Dec 2020 Last revised: 28 Apr 2021

See all articles by Yongqiang Chu

Yongqiang Chu

Belk College of Business, UNC Charlotte

Alice (Yanguang) Liu

University of Arizona, Eller College of Management, Department of Finance

Xuan Tian

Tsinghua University - PBC School of Finance

Date Written: April 28, 2021

Abstract

Exploring evacuation spill information from the U.S. Coast Guard’s National Response Center database, we examine how firms alter their green innovation activities and strategies in response to environmental spills occurring near their headquarters. We find that, in response to nearby environmental spills, firms increase both environmental innovation input and output. Increases in managers’ perceived risk and compliance cost, in part due to public outrage and reprobation, enhanced local environmental regulations, as well as human capital redeployment, are three plausible underlying economic channels through which environmental risk affects firms’ green innovation.

Keywords: Environment Risk, Green Innovation, Compliance Cost, Human Capital Redeployment

JEL Classification: O30, Q50, G30

Suggested Citation

Chu, Yongqiang and Liu, Yanguang and Tian, Xuan, Environmental Risk and Green Innovation: Evidence From Evacuation Spills (April 28, 2021). Available at SSRN: https://ssrn.com/abstract=3740551 or http://dx.doi.org/10.2139/ssrn.3740551

Yongqiang Chu (Contact Author)

Belk College of Business, UNC Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States
7046877695 (Phone)

Yanguang Liu

University of Arizona, Eller College of Management, Department of Finance ( email )

McClelland Hall
P.O. Box 210108
Tuscon, AZ Arizona 85721
United States

Xuan Tian

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
China
+86-10-62794103 (Phone)

HOME PAGE: http://xuantian.info/

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