"Political and socio-economic factors that determine financial outcome of successful green innovation"

Authors: Kevin Riehl, Florian Kiesel and Dirk Schiereck Published in Journal: "Sustainability"

Abstract

Green innovation and technology diffusion must be financially and commercially attractive to convince corporate decision-makers. This paper focuses on the factors that determine the financial outcome of successful green innovation activities conducted by large, listed companies. We employ a cross-industry dataset including more than 97,954 reports on corporate environmentalism from 286 international listed companies. Our results indicate that economic, political, cultural, firmspecific, investor-related and governance factors significantly determine the financial performance of green innovation, measured by abnormal returns. Moreover, we can show that factors that reduce the competition in green innovation markets benefit the financial success of firms operating on these. Finally, we find an opposing influence for several factors that benefit earlier stages of innovation (e.g., research output) while harming the later stages (e.g., market introduction and financial performance). These findings imply, that a spatial separation strategy for different stages of innovation supports corporate environmentalism activities. Moreover, physical property rights, the governments’ willingness to support green technologies, and economic framework conditions such as oil price, GDP, or public R&D budget need to be balanced by policymakers to address and stimulate green innovation.

Data, Code and Analysis Workflow availability

All required data and sourcecode to reproduce the analysis can be found on this GitHub repository. Please find the analysis workflow described and attached.

Reproducing the analysis of this study

The analysis is based on the programming languages "Python 3.7" and "R 4.0.2". Related packages are mentioned within the manuscript. The analysis workflow is outlined (and can be viewed on the browser) in a Jupyter Notebook format. Before cloning and running the jupyter notebook you might consider extracting the csv file from the ZIP archive in the folder "input_data".

Citations

Please cite our paper if you find our work, data, analysis and code useful:

Riehl, Kevin and Kiesel, Florian and Schiereck, Dirk. Political and socio-economic factors that determine financial outcome of successful green innovation. (submitted to Sustainability)

@article{riehl2022successfulgreeninnovation,
  title={Political and socio-economic factors that determine financial outcome of successful green innovation},
  author={Riehl, Kevin and Kiesel, Florian and Schiereck, Dirk},
  journal={Sustainability},
  year={2022}
}