Institutional Investor Horizon and Corporate Green Innovation: Evidence from Chinese Listed Companies

Drawing on a comprehensive sample of China’s A-share listed companies spanning 2007–2022, this paper provides empirical evidence on how institutional investment horizons shape corporate green innovation, with special attention to the operative mechanisms. After implementing standard data screening protocols, the resulting dataset comprising 24,362 firm-year observations is examined through panel regression techniques. The results demonstrate that longer investment horizons of institutional investors significantly promote corporate green innovation. Our mechanism analysis indicates that environmental regulations and subsidy policies significantly moderate the relationship between institutional investors’ investment horizons and green innovation. These findings provide both a novel theoretical perspective and robust empirical evidence on the determinants of corporate green innovation, and yield valuable policy insights for leveraging capital markets to facilitate the corporate transition to sustainability. It also provides specific references for policymakers to facilitate corporate green transformation and support the dual-carbon goals by guiding and incentivizing greater influence exerted by long-term institutional investors through corporate governance mechanisms.