Exploring the relationship of green investment and green innovation: Evidence from Chinese corporate performance

Companies are increasingly seeking the route of sustainable growth via green innovation in the wake of environmental catastrophe and global warming. Studying its mechanism of action on green innovation has significant consequences for the green and low-carbon transformation of firms as a green development pointer in the capital market. Based on the panel data of Chinese heavy pollution listed enterprises, we use the negative binomial distribution model to conduct a theoretical mechanism analysis and empirical data validation on this issue. We find that green investments significantly contribute to businesses' green innovation, and this effect is influenced by company age heterogeneity and information disclosure heterogeneity. Further mechanism analysis reveals that this effect works mainly through alleviating corporate financing constraints and reducing corporate agency costs. We provide recommendations for the growth of green innovation and the green low-carbon transformation of firms based on the research results.