The impact of green investor entry into buyer firms on supplier green innovation

This paper explores the spillover effect of green investor entry into buyer firms on supplier green innovation from the perspective of supply chain relationships. By analyzing paired buyer-supplier data, we find that green investor entry into buyer firms significantly promotes the green innovation of upstream suppliers, and this conclusion holds true even after a series of robustness tests. The main mechanisms through which green investor entry into buyer firms influences supplier green innovation include the transmission of green concepts and the enforcement of green contracts. Further analysis shows that when suppliers face stronger customer concentration and higher market competition, the positive effect of green investor entry into buyer firms on supplier green innovation is more pronounced. The findings of our study are relevant for policymakers and firms within the supply chain seeking to understand the role of green investors.