Strengthening of environmental justice, green dynamic capabilities, and enterprises’ green technological innovation

This study examines how strengthened environmental adjudication affects corporate green technological innovation, drawing on data from Chinese A-share listed companies from 2013-2023 and the institutional context of specialised environmental judicial reform. We investigate the mediating role of green dynamic capabilities and the moderating effect of ESG performance. Judicial intervention offsets administrative deficiencies and provides stable institutional expectations, while strengthened environmental adjudication is positively associated with green innovation by enhancing firms’ green dynamic capabilities. Strong ESG performance enhances firms’ strategic responsiveness to external judicial pressures. Further analysis reveals that these effects are more pronounced in state-owned enterprises, firms in economically developed regions, and high-pollution industries. This research provides new theoretical insights into firms’ differentiated responses to environmental regulations, along with empirical evidence and policy implications for optimising environmental justice policies and targeted governance to stimulate innovation across market entities.