Director Network Centrality and Firm Green Innovation: Moderating Effect of Absorptive Capacity

ABSTRACT Green innovation has garnered extensive concern in academia and practice as a systematic project oriented to accelerate the concordant development of economy and environment. Rooted in social network theory and resource dependence theory, the present study empirically examines the influence of director network centrality on green innovation and the moderating effect of absorptive capacity by using Chinese manufacturing listed companies as a sample. Regression results indicate director network centrality significantly boosts firm green innovation. Moreover, absorptive capacity serves as a positive moderator in the association between director network centrality and firm green innovation. Extended analysis demonstrates the impact of director network centrality on firm green innovation is predominantly driven by non‐independent directors. Director network centrality plays a more pronounced role in stimulating substantive green innovation compared to strategic green innovation. These findings not only enrich the existing literature regarding the consequences of director network and drivers of firm green innovation, but also provide guidance on how to improve firm green innovation practice.