The effects of corporate governance uncertainty on state-owned enterprises' green innovation in China: Perspective from the participation of non-state-owned shareholders

Using the percentage of ownership of the top ten non-state-owned shareholders (NSOSs) in state-owned enterprises (SOEs) as a form of corporate governance uncertainty (CGU), we examine the impacts of CGU on SOEs' green innovation performance, as measured mainly by the number of granted green patents. Analyzing data of Chinese listed SOEs from 2007 to 2017 and employing the instrumental variable approach to address the endogeneity issue, we find that CGU has a statistically significant and negative impact on SOEs' green innovation performance. Examination of the moderating effects reveals that the negative relationship between CGU and SOEs' green innovation performance is intensified if NSOSs appoint directors to the board. By contrast, higher levels of fiscal revenue (which indicate less government intervention in SOEs) and environmental regulations mitigate such a negative relationship. Further analyses on the heterogeneous effects demonstrate that the effects of CGU on SOEs' green innovation performance are more pronounced among competitive industries, local SOEs, and SOEs with single-listed shares.