Green investment funds and corporate green innovation: From the logic of social value

Under the background of how the green financial system contributes to the goal of carbon peaking and neutrality, this study explores the relationship between green investment funds (GIFs) and corporate green innovation (CGI) in Chinese listed firms. We propose a social value logic to explain the green investment of GIF in addition to its commercial value logic. We find that: (1) GIF can significantly improve CGI. (2) The positive effect of GIF on CGI is more obvious in state-owned enterprises, enterprises with a higher proportion of long-term GIF, and after a green financial system is proposed. (3) GIF is capable of contributing to the increase in stock returns, the mitigation of stock risk, and the achievement of a positive social valuation, including reducing resource consumption and increasing resource efficiency through the promotion of CGI. (4) GIFs can improve CGI by alleviating corporate financing constraints, and its rich industry experience helps to enhance CGI. This paper not only expands the research on the relationship between institutional investors and corporate innovation, but provides important insights on how the capital market can serve the green transformation of the real economy from the perspective of green investment.

Automated summary

This study explores the relationship between green investment funds (GIFs) and corporate green innovation (CGI) in Chinese listed firms and proposes a social value logic to explain GIF's green investment. The study finds that GIF can significantly improve CGI. The positive effect of GIF on CGI is more apparent in state-owned enterprises, companies with a higher proportion of long-term GIF, and after the proposal of a green financial system.