The impact of mandatory CSR disclosure on green innovation: evidence from China

Min Hong; Benjamin Drakeford; Kexian Zhang; Min Hong; Benjamin Drakeford; Kexian Zhang

doi:10.3934/GF.2020017

Green Finance

2020, Volume 2, Issue 3: 302-322. doi: 10.3934/GF.2020017

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Research article

The impact of mandatory CSR disclosure on green innovation: evidence from China

1.
School of Economics and Management, Hunan Institute of Technology, Hengyang 421002, China
2.
Economics and Finance Subject Group, Portsmouth Business School, University of Portsmouth, Portsmouth PO1 3AH, UK

Received: 07 September 2020 Accepted: 25 September 2020 Published: 28 September 2020
JEL Codes: G38, M14, M41, O32, Q56

This paper examines how mandatory CSR information disclosure affects corporate green innovation. The analysis exploits China's mandate in 2008 which requires firms to disclose CSR activities, and uses a difference-in-difference method to do the empirical analysis. The results reveal that the treat firms exhibit an increase in green innovation subsequent to the mandate which supports Porter's hypothesis with the positive role of environmental regulations. On average, after the policy implementation, the firms in the list generate 2.193–2.244 more green invention patents than those if not in the list. In addition, the impact of mandatory CSR disclosure is heterogeneous on different types of firms. Firms with large size, state-owned firms and firms in pollution-intensive industries are more likely to be affected by mandate, which suggests that these firms are more sensitive to the mandatory information disclosure.
- corporate social responsibility,
- green innovation,
- mandatory information disclosure
Citation: Min Hong, Benjamin Drakeford, Kexian Zhang. The impact of mandatory CSR disclosure on green innovation: evidence from China[J]. Green Finance, 2020, 2(3): 302-322. doi: 10.3934/GF.2020017

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Abstract

This paper examines how mandatory CSR information disclosure affects corporate green innovation. The analysis exploits China's mandate in 2008 which requires firms to disclose CSR activities, and uses a difference-in-difference method to do the empirical analysis. The results reveal that the treat firms exhibit an increase in green innovation subsequent to the mandate which supports Porter's hypothesis with the positive role of environmental regulations. On average, after the policy implementation, the firms in the list generate 2.193–2.244 more green invention patents than those if not in the list. In addition, the impact of mandatory CSR disclosure is heterogeneous on different types of firms. Firms with large size, state-owned firms and firms in pollution-intensive industries are more likely to be affected by mandate, which suggests that these firms are more sensitive to the mandatory information disclosure.

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