Government subsidy and corporate green innovation - Does board governance play a role?

This study attempts to uncover the curvilinear relationship between government subsidies and corporate green innovation in China's new energy vehicle (NEV) industry, and investigate the moderating effect of board governance within this relationship. Using a strong balanced panel data from all NEV firms that have acquired government subsidy (GS) from 2013 to 2018, this study found government subsidy exhibit a U-shaped relationship to corporate green innovation (CGI). It also reveals that some facets of board governance (BG) significantly enhanced this U-shaped relationship, including board gender diversity, board age diversity, CEO duality and board educational level. Our study specifically suggests that policymakers should incorporate such diversity indicators as the proportion of female directors into investment evaluation standards (e.g. corporate governance, environmental, social and governance, and sustainable investment), in order to promote environmental benefits and societal equality and enhance women's empowerment.