Breaking the Silenced Legitimacy: Multi‐source Environmental Legitimacy Evaluations and Firm Green Innovation

Abstract This study explores how multi‐source environmental legitimacy evaluations influence corporate green innovation. Building on the multilevel theory of the legitimacy process, we argue that multi‐source legitimacy evaluations—encompassing evaluations from environmental organizations, industry associations, banks and other stakeholders—enhance the validity of environmental legitimacy evaluations and encourage more substantive environmental practices, that is, green innovation. Using longitudinal panel data from Chinese listed firms from 2014 to 2021, this study uses the Corporate Information Transparency Index project in China as a carrier for multi‐source environmental evaluations to examine its impact on green innovation. Our empirical results show that such evaluations significantly promote corporate green innovation. This positive effect is stronger for firms with greater media coverage and for those operating in regions with more developed institutional intermediaries.