Earnings Pressure And Green Innovation

In today’s world,green development has become a key topic of international concern.In response to the call of the international community,China has also taken many measures to promote green development,while more and more enterprises are beginning to focus on green development.At the same time,as a typical alternative variable to market expectations,securities analysts’ earnings forecasts that exceed the internal operating expectations of the enterprise will exert pressure on the enterprise,thereby interfering with the decision-making and behavior of the management,including the green innovation decision-making of the enterprise.Therefore,this article constructs a model to study the impact of profit pressure on green innovation decision-making in enterprises,and further examines the governance effects of integration of two roles,executive heterogeneity,and salary stickiness on the relationship between the two.The research results of the article indicate that profit pressure has a significant negative impact on green innovation of enterprises.At the same time,profit pressure has a significant negative impact on both compliant and value oriented green innovation in enterprises.The difference between actual performance and market expectations can cause profit pressure on enterprises and interfere with managers’ green innovation decisions.Due to agency issues,managers often tend to reduce investment in green innovation research and development in an attempt to meet analyst predictions and avoid further increases in the risk of layoffs.The heterogeneity test found that among enterprises with different property rights,green innovation in state-owned enterprises is not negatively affected by profit pressure,while green innovation in non state-owned enterprises is negatively affected by profit pressure.In different industries,only technology intensive and labor intensive enterprises’ green innovation will be significantly affected by profit pressure,while resource intensive enterprises will not be affected.In different regions,green innovation of enterprises in the eastern and western regions will be negatively affected by profit pressure,while green innovation of enterprises in the northeast and central regions will not be significantly affected by profit pressure.Further research examined the internal governance mechanism that alleviates the inhibitory effect of earnings pressure on green innovation.The study found that the combination of two roles and executive pay stickiness can generally alleviate the negative correlation between earnings pressure and enterprise green innovation,but this impact is mainly reflected in the negative correlation between earnings pressure and standard oriented green innovation,while it has no impact on the negative correlation between earnings pressure and value oriented green innovation.However,executive heterogeneity has no impact on the negative correlation between profit pressure and green innovation.Finally,based on the above results,the article analyzes the reasons and puts forward relevant suggestions.The theoretical significance of this study lies in incorporating the operating expectations of the capital market into the research framework of green innovation of enterprises,and enriching the research on the impact of external operating expectations on green innovation of enterprises.At the same time,the research in this article can help governments and enterprises understand the relationship between profit pressure and green innovation,as well as relevant governance mechanisms,which is of great significance for promoting the development of green innovation in enterprises.