Strategic or substantive innovation?-The impact of institutional investors' site visits on green innovation evidence from China

Green innovation is a critical path for enterprises to improve their sustainable development level. As an important external force of corporate governance, institutional investors may play a role in promoting green innovation. This study analyzes the direct effect of institutional investors on green innovation and the moder-ating effect of firm size, and empirically verifies it with the data from 957 Chinese manufacturing enterprises from 2012 to 2019. We find that institutional investors' site visits are positively correlated with the level of green innovation, and that firm size positively moderates this relationship. Further, this study finds that site visits by pressure-sensitive institutional investors will only induce enterprises to cater to investors and carry out strategic green innovation, while pressure-resistant institutional investors will promote enterprises to carry out substantial green innovation. In additional analysis results, we find that the promotion effect of site visit on green innovation is more significant in enterprises with dual CEO positions and in low-competitive market environment.

Automated summary

This study examines the impact of institutional investors on green innovation and the moderating effect of firm size. The findings show that institutional investors' site visits are positively related to the level of green innovation, and that firm size moderates this relationship. Additionally, the study differentiates between pressure-sensitive and pressure-resistant institutional investors and their effects on strategic vs. substantial green innovation.