Tackling Pressure Through Collaboration: Green Innovation Strategies of Firms in Response to Climate Risks

Climate risk has become a critical factor shaping firm strategies. Examining the influence of climate risk on open green innovation is vital for the advancement of ecological civilization. Using panel data from Chinese A-share-listed firms from 2010 to 2023, this study finds that climate risks promote open green innovation. The mechanism analyses reveal that climate risk promotes open green innovation by raising external green demand and imposing internal resource constraints. Specifically, rising climate risk increases the regional green coverage, the regional environmental budget, and the number of firms’ green investors, while reducing the financial policy intensity index, which facilitates open green innovation. The heterogeneity analysis indicates that firms with more pressing green needs and stronger collaboration capabilities are more likely to adopt open green innovation. Further tests demonstrate that climate risk significantly inhibits firms’ total green innovation and closed green innovation. This study provides empirical evidence highlighting the value of collaboration. Collaborative innovation strategies serve as a more effective green innovation approach for firms to cope with climate challenges. This study also offers policy-relevant insights for improving climate governance and green development support.