Hostname: page-component-76d6cb85b7-92wsb Total loading time: 0 Render date: 2026-07-11T23:37:40.499Z Has data issue: false hasContentIssue false
  • English
  • Français

The effects of state capital injection on firms’ green innovation

Published online by Cambridge University Press:  12 February 2026

Gongxiong Jiang Open the ORCID record for Gongxiong Jiang [Opens in a new window] ,
Peng Yuan ,
Renjie Yu  and
Hailong Li
Gongxiong Jiang
Affiliation:
School of Automotive Business, Hubei University of Automotive Technology, Shiyan, China
Peng Yuan*
Affiliation:
Institute of Western China Economic Research, Southwestern University of Finance and Economics, Chengdu, China
Renjie Yu
Affiliation:
School of International Economics and Trade, Lanzhou University of Finance and Economics, Lanzhou, China
Hailong Li
Affiliation:
Sichuan Academy of Social Sciences, Chengdu, China
*
Corresponding author: Peng Yuan; Email: ypswufe2000@163.com
Get access Rights & Permissions [Opens in a new window]

Abstract

The environmental effects of state ownership are still controversial. The ‘reverse privatization’ phenomenon of injecting state capital into non-state-owned enterprises offers a novel perspective to study the environmental impact of state ownership. Using data on Chinese listed companies from 2011 to 2021, this study empirically analyses the impact of state capital injections (SCAI) on firms’ green innovation. Our results reveal that SCAI has a positive effect on the quantity and quality of green innovation, reflecting the net outcome of opposing forces. SCAI promotes green innovation by enhancing firms’ innovative capabilities and willingness, increasing environmental regulatory pressure and reducing managerial myopia, though it may hinder such innovation by exacerbating agency problems and policy burdens. Moreover, SCAI’s positive effects on green innovation quantity and quality are more pronounced for firms with relatively high state capital control, in heavily polluting industries and in less marketized regions.

Keywords

green innovationinnovation qualityinnovation quantitymixed ownership reformstate capital injection

JEL classification

Q55: Technological Innovation O39: Other G32: Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill

Information

Type
Research Article
Information
Environment and Development Economics , First View , pp. 1 - 18
Copyright
© The Author(s), 2026. Published by Cambridge University Press.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Calza, F, Profumo, G and Tutore, I (2016) Corporate ownership and environmental proactivity. Business Strategy and the Environment 25, 369–389.10.1002/bse.1873CrossRefGoogle Scholar
Chen, QA, Tang, SX, Xu, Y and Lin, JY (2024) How much state ownership is more conducive to corporate innovation in firms? Evidence from China. Asian Journal of Technology Innovation 32, 1–28.10.1080/19761597.2022.2159848CrossRefGoogle Scholar
Chen, VZ, Li, J, Shapiro, DM and Zhang, XX (2014) Ownership structure and innovation: an emerging market perspective. Asia Pacific Journal of Management 31, 1–24.10.1007/s10490-013-9357-5CrossRefGoogle Scholar
Chernykh, L (2011) Profit or politics? Understanding renationalization in Russia. Journal of Corporate Finance 17, 1237–1253.10.1016/j.jcorpfin.2011.06.009CrossRefGoogle Scholar
Dong, Y and Liu, PZ (2022) The effect of state capital injection on private firms’ performance: evidence from Chinese industrial firms. China Economic Quarterly International 2, 85–97.10.1016/j.ceqi.2022.05.001CrossRefGoogle Scholar
Fan, ZM, Chen, Y and Mo, YF (2024) Management myopia and corporate ESG performance. International Review of Financial Analysis 92, 103071.10.1016/j.irfa.2024.103071CrossRefGoogle Scholar
Huang, KG, Jing, RT, Xia, J, Zhang, CM, Zhong, WG and Zhu, DH (2024) Coevolution of SOEs and the Chinese economy: the roles of SOE heterogeneity from the institutional, strategic, and organizational perspectives. Management and Organization Review 20, 704–715.10.1017/mor.2024.68CrossRefGoogle Scholar
Huang, LX, Liu, SL, Han, YH and Peng, KM (2020) The nature of state-owned enterprises and collection of pollutant discharge fees: a study based on Chinese industrial enterprises. Journal of Cleaner Production 271, 122420.10.1016/j.jclepro.2020.122420CrossRefGoogle Scholar
Huang, ZK, Li, LX, Ma, GR and Qian, J (2021) The reversal of privatization in China: a political economy perspective. Journal of Corporate Finance 71, 102115.10.1016/j.jcorpfin.2021.102115CrossRefGoogle Scholar
Huang, ZK, Li, LX, Ma, GR and Xu, LC (2017) Hayek, local information, and commanding heights: decentralizing state-owned enterprises in China. American Economic Review 107, 2455–2478.10.1257/aer.20150592CrossRefGoogle Scholar
Jiang, GX, Yuan, P and Li, QN (2025) Agglomeration externalities, industry life cycle and firm survival: evidence from Chinese manufacturing start-ups. Regional Studies 59, 1–15.10.1080/00343404.2024.2417702CrossRefGoogle Scholar
Jiang, GX, Yuan, P and Yang, FD (2023) The effect of state capital injection on firms’ pollution emissions: evidence from China. Journal of Environmental Management 331, 117269.10.1016/j.jenvman.2023.117269CrossRefGoogle ScholarPubMed
Karimi Takalo, S, Sayyadi Tooranloo, H and Shahabaldini Parizi, Z (2021) Green innovation: a systematic literature review. Journal of Cleaner Production 279, 122474.10.1016/j.jclepro.2020.122474CrossRefGoogle Scholar
Kong, DM and Wang, MB (2016) Government stakes as an insurance policy: evidence from seasoned equity offerings of Chinese firms. Emerging Markets Finance and Trade 52, 2292–2308.10.1080/1540496X.2015.1095558CrossRefGoogle Scholar
La Porta, R, Lopez-De-Silanes, F and Shleifer, A (1999) Corporate ownership around the world. Journal of Finance 54, 471–517.10.1111/0022-1082.00115CrossRefGoogle Scholar
Li, KH, Xiang, YY, Zhou, CB and Lin, RH (2023) Promote or inhibit: state-owned equity participation and family firms’ innovation investment. Journal of Innovation and Knowledge 8, 100354.10.1016/j.jik.2023.100354CrossRefGoogle ScholarPubMed
Liu, QG and Tian, G (2012) Controlling shareholder, expropriations and firm's leverage decision: evidence from Chinese non-tradable share reform. Journal of Corporate Finance 18, 782–803.10.1016/j.jcorpfin.2012.06.002CrossRefGoogle Scholar
Liu, ZM, Li, X, Peng, XR and Lee, S (2020) Green or nongreen innovation? different strategic preferences among subsidized enterprises with different ownership types. Journal of Cleaner Production 245, 118786.10.1016/j.jclepro.2019.118786CrossRefGoogle Scholar
Lu, Z, Liang, YZ, Hu, YL and Liu, Y (2024) Is managerial myopia detrimental to corporate ESG performance? International Review of Economics and Finance 92, 998–1015.10.1016/j.iref.2024.02.061CrossRefGoogle Scholar
Narayanan, MP (1985) Managerial incentives for short-term results. Journal of Finance 40, 1469–1484.Google Scholar
Pan, X, Chen, XJ, Sinha, P and Dong, NN (2020) Are firms with state ownership greener? An institutional complexity view. Business Strategy and the Environment 29, 197–211.10.1002/bse.2358CrossRefGoogle Scholar
Prabhu, GN (1997) Joint research and development projects as technology training ventures. Technology Analysis and Strategic Management 9, 453–472.10.1080/09537329708524297CrossRefGoogle Scholar
Resimic, M (2021) Network ties and the politics of renationalization: embeddedness, political-business relations, and renationalization in post-Milosevic Serbia. Comparative Political Studies 54, 179–209.10.1177/0010414020926223CrossRefGoogle Scholar
Shleifer, A (1998) State versus private ownership. Journal of Economic Perspectives 12, 133–150.10.1257/jep.12.4.133CrossRefGoogle Scholar
Sun, YY and Yang, Y (2024) Do government environmental target constraints break the political resource curse? A study on political connections and firm green innovation. International Review of Economics and Finance 96, 103534.10.1016/j.iref.2024.103534CrossRefGoogle Scholar
Wang, H and Jin, YH (2007) Industrial ownership and environmental performance: Evidence from China. Environmental and Resource Economics 36, 255–273.10.1007/s10640-006-9027-xCrossRefGoogle Scholar
Wang, K and Jiang, W (2021) State ownership and green innovation in China: the contingent roles of environmental and organizational factors. Journal of Cleaner Production 314, 128029.10.1016/j.jclepro.2021.128029CrossRefGoogle Scholar
Wang, XL, Fan, G and Yu, JW (2017) Marketization Index of China’s Province: Neri Report 2016. Beijing: Social Sciences Academic Press (in Chinese).Google Scholar
Xiao, G and Shen, SH (2022) To pollute or not to pollute: political connections and corporate environmental performance. Journal of Corporate Finance 74, 102214.10.1016/j.jcorpfin.2022.102214CrossRefGoogle Scholar
Yang, H, Steensma, HK and Ren, T (2020) State ownership, firm innovation and the moderating role of private-sector competition: the case of China. Competitiveness Review 31, 729–746.10.1108/CR-02-2019-0024CrossRefGoogle Scholar
Zhang, J and Zheng, WP (2018) Has catch-up strategy of innovation inhibited the quality of China's patents? Economic Research Journal 53, 28–41. (in Chinese).Google Scholar
Zhou, KZ, Gao, GY and Zhao, HX (2017) State ownership and firm innovation in China: an integrated view of institutional and efficiency logics. Administrative Science Quarterly 62, 375–404.10.1177/0001839216674457CrossRefGoogle Scholar
Supplementary material: File

Jiang et al. supplementary material

Jiang et al. supplementary material
Download Jiang et al. supplementary material(File)
File 509.8 KB