Biodiversity Governance and Corporate Green Innovation: Evidence from China’s National Nature Reserve Supervision Policy

Biodiversity conservation has become an essential component of global sustainability governance, raising important questions regarding how ecological policies influence corporate sustainable transformation. This study examines whether and how biodiversity governance promotes corporate green innovation by exploiting China’s Green Shield Action as a quasi-natural experiment. Using a panel dataset of Chinese A-share listed firms from 2013 to 2022 and a multi-period difference-in-differences (DID) framework, this study investigates the innovation effects, underlying mechanisms, spatial heterogeneity, and strategic responses associated with biodiversity governance. The results show that biodiversity governance significantly promotes corporate green innovation, with stronger effects observed for technology-oriented green innovation, measured by invention patents and utility model patents. Spatial analysis reveals that firms located closer to nature reserves experience stronger innovation incentives, suggesting that geographic proximity increases firms’ exposure to biodiversity-related regulatory pressure and ecological governance expectations. Mechanism analyses indicate that biodiversity governance stimulates corporate innovation by enhancing local government environmental attention, public environmental attention, and managerial environmental risk perception. Furthermore, additional analyses reveal that spatial adjustment responses, including registered address relocation and subsidiary expansion, weaken the innovation incentives generated by biodiversity governance. Heterogeneity analyses show that the innovation effects are stronger among firms with higher biodiversity exposure, enterprises located in non-resource-dependent regions, non-heavy-polluting industries, and areas with larger protected areas. This study contributes to the sustainable transition literature by demonstrating that biodiversity governance can function not only as an ecological protection mechanism but also as an institutional driver of corporate green transformation. The findings provide implications for designing coordinated biodiversity policies that integrate ecological conservation, regional governance, and corporate innovation incentives.