Summary:
Green innovation has become a pivotal strategy for reconciling economic growth with environmental protection. While existing research has extensively explored the drivers of green innovation from institutional and firm-level perspectives, the role of top executives' intrinsic value orientations remains underexplored. This study addresses this gap by investigating how CEOs with a social value orientation, influence corporate green innovation. Drawing on social capital theory and stewardship theory, we posit that such CEOs foster green innovation through two primary mechanisms: alleviating external resource constraints and enhancing internal environmental consciousness. We hypothesize that social-value-oriented CEOs bolster green innovation via a resource channel and an awareness channel. The resource channel suggests that these CEOs, often through participation in philanthropic organizations, build stronger relationships with key stakeholders such as governments, investors, and communities. This enhanced social capital facilitates access to critical resources by easing financing constraints and attracting high-skilled talents, thereby providing the necessary foundation for green innovation activities that are typically characterized by high costs and long cycles. Simultaneously, the awareness channel, rooted in stewardship theory, posits that these CEOs act as organizational stewards with a long-term vision. They are more likely to intrinsically integrate environmental sustainability into corporate strategies, foster a green culture, and exhibit greater tolerance for the risks associated with green research and development, thus creating an internal environment conducive to substantive innovation. To test these hypotheses, we construct a unique dataset of Chinese A-share listed manufacturing companies from 2007 to 2022. Our key explanatory variable, Social-value-oriented CEO (SocialCEO), is a binary indicator that equals one if the CEO participates in at least one charitable organization, based on hand-collected data from China's official “Charity China” platform. Our primary measure of green innovation is the number of green invention patent applications, identified using the World Intellectual Property Organization's International Patent Classification Green List. We employ a fixed-effects panel regression model controlling for a comprehensive set of firm-level characteristics and CEO demographic variables. The baseline results provide robust evidence that firms led by social-value-oriented CEOs exhibit a significant increase in green invention patent applications. The mechanism tests corroborate the proposed dual channels. We find that social-value-oriented CEOs significantly reduce corporate financing constraints and increase the proportion of high-skilled employees, validating the resource channel. Concurrently, they lead to higher environmental protection investments, more frequent green training, and a stronger corporate green culture, supporting the awareness channel. Heterogeneity analyses reveal boundary conditions for this effect. The positive impact is more pronounced in technology-intensive industries and non-heavily polluting industries. Furthermore, the effect is stronger when CEOs possess greater power, as indicated by CEO-chairman duality, or hold higher shareholdings, suggesting that decision-making authority and incentive alignment amplify their influence. Additional analyses yield nuanced insights. The promotive effect is primarily observed in substantive green innovation , indicating a focus on real technological advancement. Crucially, the interaction between social-value-oriented CEOs and green innovation is associated with a significant increase in long-term firm value, underscoring the economic sustainability of this strategic alignment. This study contributes to the literature in several ways. It extends research on the antecedents of green innovation by introducing and validating CEOs' social value orientation as a novel and significant driver. It enriches upper echelons theory by delineating the specific resource-based and awareness-based pathways through which personal values translate into strategic environmental outcomes. Our findings also offer practical implications for corporate governance and policy-making, suggesting the value of fostering leadership with prosocial tendencies and creating supportive institutional environments for green transformation.
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