Does Green Innovation Have Peer Effect Among Supply Chain Partners?

As innovation activities aimed at promoting green technology and ameliorating ecological environment,green innovation can effectively coordinate economic growth and environmental protection,thus it is regarded as an important strategy to achieve sustainable development.Existing literature on green innovation likely concentrates on firms and adheres to the classical logic “outside pressure,green behavior and firms performance”.Existing literature utilizes the system theory and the stakeholder theory to explain the driving forces of firms’ green innovations from the perspective of the government,shareholders and consumers.Existing literature as well as are based on the legitimacy theory and the resource-based view to investigate the mechanisms of green innovation on firms’ financial or environmental performance.Based on Chinese commercial practice that firms and their customers’ green innovation share the same trends of rise and fall simultaneously as well as the facts that our government advocates carbon reduction,environmental protection and green supply chain,this study takes customers who are firms’ important external stakeholders as the research perspective to explore whether green innovation have peer effect between supply chain partners and its mechanism as well as economic consequences.This study provides effective advice for promoting Chinese firms to engage in green innovation and environment protection.This study hand-collects the matching data of “firm-customer” from 2004 to2020 in Chinese A-share in order to empirically analyze the peer effect of green innovation among supply chain partners and its mechanism as well as economic consequences.Results demonstrate that:(1)Customers’ green innovation is positive with firms’ green innovation,suggesting that green innovation has peer effect among supply chain partners,which follows the information-based channel rather than rivalry-based channel.(2)Green innovation improves customers’ bargaining power,which promotes firms to engage in green innovation,thus showing the effect of green innovation among supply chain partners.(3)The peer effect of green innovation among supply chain partners is more pronounced when the business environment similarity between firms and customers is high(firms and customers are located in the same province or industry).(4)Further researches document that exogenous environmental events like PM2.5 beyond index in 2011 and the Environmental Protection Law implemented in 2015 enhance the peer effect of of green innovation among supply chains partners.(5)Green innovation has reputation effect and risk effect,indicating that green innovation can help firms to get trade credit financing from customers and suppliers,but damage firm value.However,customers’ green innovation can weaken the positive associations between firms’ green innovation and trade credit financing,and the negative relationship between firms’ green innovation with firm value.Therefore,this study enriches the relevant literature about the driving factors and economic consequences of green innovation,and expands the application scenarios and theoretical connotation of peer effect.Moreover,this study also has important policy implications for the development of green economy and construction of green supply chain,as well as the realization of green transformation and “dual carbon” goals.