The role of board capital in driving green innovation: Evidence from China

Despite the strategic significance of green innovation and the substantial role of board capital in corporate decision-making, no prior study has deeply investigated the relationship between board capital and green innovation. By combining the agency and resource dependence perspectives, we propose that board capital facets (i.e. human and social capital) influence the green innovation performance. The dataset of 2064 Chinese listed firms (2010–2018) is employed. Consistent with our expectations, we find that board capital positively affects green innovation. The findings also indicate that absorptive capacity mediates this relationship. Further, while exploring the interrelationships among board capital, green innovation and firm’s environmental performance, we identified the mediating role of green innovation on the board capital–environmental performance relationship. The study has implications for academicians, practitioners, and policy-makers as they should consider the education level, expertise, and interlocking relationships of potential and existing directors to enhance their ability for correct strategic decisions, particularly related to environmental outcomes such as green innovation.