Retail investor attention and corporate green innovation: Evidence from China

This paper investigates whether retail investor attention promotes or inhibits corporate green innovation. Using Chinese nonfinancial public listed firms from 2011 to 2020, we find that retail investor attention significantly positively impacts corporate green innovation. This finding still holds after a series of robustness tests for possible endogeneity concerns, alternative explanatory variables, and regression methods. We further verify that retail investor attention increases corporate green innovation by increasing information transparency, alleviating financing constraints and deterring agency costs. Cross-sectional heterogeneity analysis further supports our channel test, in which our results are pronounced for firms with less information asymmetry, higher reputation capital and better corporate governance characteristics. Our results shed essential insight into sustainable and green growth from a micro enterprise perspective in the digital economic era.