Investor’s Exit Threat And Corporate Green Innovation

The 20 th Party Congress report clearly put forward that we should accelerate the green transformation of the development mode and pay close attention to green and low-carbon technology research and development in the production mode.Green innovation has become the core imperative for the country to promote green development and achieve high-quality development.However,enterprises,as key green innovation subjects,still have problems such as uneven innovation level and insufficient motivation,and it is urgent to find new motivation to stimulate their green innovation from the perspective of stakeholders.In recent years,the total investment amount of institutional investors in China has increased significantly,showing the trend of diversification of types and optimization of structure.The current research on governance effects from the perspective of institutional investors’ shareholding is mostly based on the “voting with hands” mechanism,but in reality,institutional investors often find it difficult to play a direct role due to high regulatory costs,and thus prefer to use the “exit threat” mechanism to achieve participation in In reality,institutional investors often find it difficult to play a direct role due to high regulatory costs,and thus prefer to use the “exit threat” mechanism to participate in corporate governance.Based on stakeholder theory,this thesis investigates the impact of exit threat on green innovation by institutional investors,and further introduces the threshold condition of shareholding ratio.Firstly,we use VOSviewer to analyze the literature related to corporate green innovation and institutional investors’ exit threat,and review the existing research results.Secondly,based on the current situation of institutional investors’ development in China,combined with the relevant institutional and policy environment,a theoretical analysis framework of institutional investors’ exit threat affecting corporate green innovation is constructed and research hypotheses are proposed based on principalagent theory,game theory,resource-based theory,signaling theory,etc.Then,based on the multiple linear regression model and threshold regression model,using the instrumental variables method,2SLS regression,and propensity score matching method,we empirically test the impact of institutional investors’ exit threat on corporate green innovation and its path of action,as well as the threshold effect of institutional investors’ shareholding ratio,using Shanghai and Shenzhen A-share listed companies in China from 2010 to 2020 as research samples.It is found that:(1)the threat of institutional investors’ withdrawal can significantly improve the level of green innovation,which is reflected in the increase of total green patent applications and green invention patent applications;(2)the path analysis shows that the threat of institutional investors’ withdrawal can strengthen enterprises’ R&D capital investment and promote the fulfillment of environmental responsibility,thus promoting green innovation;(3)in the cases where the institutional investors are stress-resistant and the enterprises are nonstate-owned(3)the green innovation empowerment effect of institutional investors’ exit threat is more significant when the institutional investors are stress-resistant and the enterprises are non-state owned or in heavy pollution industries;(4)with the shareholding ratio of institutional investors as the threshold variable,there is a singlethreshold effect of exit threat on the green innovation of enterprises,and the positive effect of exit threat is revealed when the shareholding ratio of institutional investors exceeds the threshold value,and this threshold effect is more significant in non-state owned enterprises or in heavy pollution enterprises.The threshold effect is more pronounced in non-SOEs or heavy polluters.Finally,in order to better play the role of institutional investors in the governance of exit threat,this thesis puts forward policy recommendations such as improving the protection mechanism of institutional investors,building a differentiated regulatory system for institutional investors,and establishing a multi-faceted and collaborative corporate green innovation driving body of government,media,and market regulators.Starting from the psychological concept of “exit threat”,this thesis reveals the relationship between institutional investors’ exit threat and corporate green innovation and its path of action,clarifies the boundary conditions for institutional investors’ exit threat to produce governance effects,enriches the research literature in the intersection of social psychology and corporate behavior,and is useful for clarifying the position of institutional investors and better playing the role of “green innovation” in the capital market.It has a strong reference value to clarify the positioning of institutional investors and better play the function of “ballast” in the capital market.