Retail investors’ green attention and corporate carbon emissions: evidence from China

Purpose Elevated carbon emissions have garnered substantial attention within the academic community, where scholars are exploring the impacts of various factors, including administrative regulations and market mechanisms, on carbon emissions. This study aims to examine the impact of retail investors’ green attention on corporate carbon emissions. Design/methodology/approach To achieve this goal, the study uses the Word2Vec algorithm to develop a green interaction lexicon and extracts green interactions from the comprehensive corpus of interaction texts between enterprises and retail investors. Subsequently, the intensity of green interactions is quantified, and the influence of such interactions on corporate carbon emissions is estimated using the ordinary least squares method. Findings The authors find that the green interactions effectively reduce corporate carbon emissions, with the green attention effect, external pressure effect and information diffusion effect, all induced by these interactions, playing pivotal roles in this reduction. The result remains robust after undergoing multiple robustness and endogeneity tests. The mechanism tests reveal that the green interactions decrease corporate carbon emissions by stimulating green innovation, enhancing corporate green awareness and reducing green agency costs. Originality/value This study not only complements the existing research on the corporate governance role of retail investors but also provides theoretical support for advancing the low-carbon transformation of companies.