Country’s technology and innovation, and corporate environmental innovation, environmental performance and financial performance

Abstract

Societal concerns regarding climate change have increasingly intensified in recent decades. These climate change concerns, coupled with the increasing trend to account for and value the natural environment, have compelled firms to operate in a more environmentally friendly way to ensure their legitimacy and satisfy stakeholders’ demands.
To achieve business success, firms undertake to improve their environmental outcomes and balance the relationship between their environmental and economic performance. Many studies have conducted empirical research in these fields, but they still have limitations. Moreover, there is a lack of research exploring the role of country-level resources (i.e. country-level technology and innovation (CLTAI)) on firms on these topics. Consequently, the investigation of the relationships between CLTAI, corporate environmental innovation (CEI), environmental outcomes and economic performance is of significant interest. Motivated by this interest, this thesis examines: 1) the associations of CEI and CLTAI with corporate environmental performance (CEP) and the moderating effect of CLTAI on the CEI-CEP association; 2) the associations of CEI and CLTAI with corporate carbon intensity (CCP) and the moderating effect of CLTAI on the CEI-CCP association; 3) the associations of CEP and CLTAI with firm value and profitability (FVP) and the moderating effect of CLTAI on the CEP-FVP association.
Based on the resource-based view, natural resource-based view, network theory, spillover effect and the extant empirical research, this thesis develops its hypotheses. Using a cross-industry sample of firms from 45 countries in 2008-2020 and employing multilevel regression models, the study uncovers several key findings: 1) CEI is positively associated with CEP but is not necessarily associated with lower CCP; 2) different aspects of CEP are variably related to firm value; 3) CLTAI positively correlates with CEP and negatively with CCP; 4) CLTAI investments are positively associated with firm value in the long term, but it is negatively associated with firms’ profitability; 5) CLTAI moderates the relationships between CEI and CEP, CEI and CCP as well as CEP and FVP.
This thesis makes significant contributions by elucidating the varying associations of CEI with CEP and CCP and by revealing the effectiveness of CEI in dealing with environmental issues. It also contributes to bridging the gaps in both technology and innovation and the firm performance literature by disclosing that firms’ environmental outcomes and economic performance are associated with not only firm-level resources but also country-level resources, i.e. CLTAI, and extend the moderators of the CEI-CEP, CEI-CCP and CEP-FVP associations. On this basis, this thesis provides valuable insights to businesses, policymakers and researchers, emphasising the importance of country-level technology and innovation resources in driving sustainable corporate practices and enhancing firm performance.

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Identifiers

ORCID for Rui Yan: orcid.org/0000-0003-0192-4531

ORCID for Krish Vithana: orcid.org/0000-0001-9976-7399

ORCID for Faizul Haque: orcid.org/0000-0003-1556-3466

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