The impact of common institutional ownership on green innovation of China’s energy firms

We examine the role of common institutional ownership in promoting corporate green innovation, utilizing a comprehensive panel dataset of Chinese energy firms from 2009 to 2021. Our analysis reveals that both common institutional ownership and green common institutional ownership significantly enhance green innovation. Mechanism analyses indicate that common institutional ownership promotes corporate green innovation through governance, resource integration, and information advantage mechanisms, whereas green common institutional ownership primarily promotes green innovation through governance and information advantage mechanisms. Heterogeneity analyses further demonstrate that common institutional ownership exerts a greater impact on non-SOEs, firms in heavy-polluting industries, and those in industries with high financial constraints. Moreover, green common institutional ownership has a more pronounced influence on non-SOEs, firms in non-heavy-polluting industries, and those facing low financial constraints. Our findings contribute to the literature on the determinants of corporate green innovation and offer valuable insights for strengthening corporate environmental governance in emerging markets.