Green innovation and environmental misconduct
ISSN: 0307-4358
Article publication date: 22 March 2022
Issue publication date: 7 July 2022
Abstract
Purpose
The aim of this study is to discuss the idea that the legal cost of environmental violations, along with reputational concerns, may persuade firms to generate more green patents.
Design/methodology/approach
This study examines the relationship between firms generating green patents and environmental violations. The authors show the green innovation trend over the past two decades and explore the potential motivations behind it. In addition, the authors investigate the impact of regulatory actions, such as governmental finds, on green innovation.
Findings
The authors find that firms that commit environmental violations switch to producing green patents in the long-run. The authors also document that market reaction following environmental offenses is negative for firms with a high ratio of green patents in their portfolio.
Originality/value
This study explores innovation. The authors investigate the literature and trends of green innovation over the past 20 years. The authors also find that green innovation is growing at a relatively slow rate. Overall, this study highlights the importance of green innovation and firms’ response to corporate wrongdoing.
Keywords
Acknowledgements
This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. The authors declare no conflicts of interest.
Citation
Rayfield, B. and Unsal, O. (2022), "Green innovation and environmental misconduct", Managerial Finance, Vol. 48 No. 8, pp. 1156-1173. https://doi.org/10.1108/MF-09-2021-0458
Publisher
:Emerald Publishing Limited
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