Toxic Emissions and Corporate Green Innovation

103 Pages Posted: 20 May 2022 Last revised: 8 Jan 2024

See all articles by Wenquan Li

Wenquan Li

University of Queensland - Business School

Suman Neupane

University of Queensland

Kelvin Jui Keng Tan

University of Queensland - Business School; Financial Research Network (FIRN)

Date Written: October 21, 2022

Abstract

This paper examines the relationship between firms’ toxic emissions and green innovation. We show that high-emission companies produce more green patents of higher quality and value than low-emission firms. High-pollution firms appear to bring meaningful change in their green credentials by generating more environmental-related green patents using explorative innovation strategies. We exploit the BP Deepwater Horizon oil spill and the election of President Trump as sources of quasi-exogenous variation to alleviate endogeneity concerns. In addition to mitigating their own future toxic air releases, green patents produced by high-emission firms also possess external implications for advancing the green knowledge frontier.

Keywords: Corporate green innovation; Toxic emissions; Policy effect; Environmental awareness; ESG investments

JEL Classification: G30, G38, K32, O30, Q50

Suggested Citation

Li, Wenquan and Neupane, Suman and Tan, Kelvin Jui Keng, Toxic Emissions and Corporate Green Innovation (October 21, 2022). Available at SSRN: https://ssrn.com/abstract=4113290 or http://dx.doi.org/10.2139/ssrn.4113290

Wenquan Li (Contact Author)

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Suman Neupane

University of Queensland

Kelvin Jui Keng Tan

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
597
Abstract Views
2,768
Rank
84,187
PlumX Metrics