Peer effect in corporate green innovation and its impact on sustainability performance: evidence from China

Purpose Previous studies have primarily investigated the impacts of regulatory and institutional factors on corporate green innovation (GI). However, these studies basically regard GI as a passive choice under the regulation of stakeholders, ignoring enterprises’ spontaneous attention and active learning of stakeholders’ behavior. Therefore, this paper aims to investigate the peer effect in corporate GI. Design/methodology/approach This paper uses the fixed effect model to conduct empirical analyses based on panel data from Chinese manufacturing companies listed in Shanghai and Shenzhen A-shares from 2008 to 2020. Findings The empirical results show that peer firms’ GI can promote corporate GI, indicating that the peer effect does exist in corporate GI. Environmental regulation, media coverage and Confucianism can enhance the peer effect in corporate GI. However, the intensity of the peer effect in corporate GI has a negative impact on sustainability performance. Besides, industry follower firms are more sensitive to leader firms, which supports the information-based motives of the peer effect. Furthermore, the heterogeneity test reveals that the peer effect in corporate GI is more pronounced in state-owned enterprises. Originality/value First, this paper contributes to the research on boundary conditions for the peer effect in GI. Second, this paper reveals whether and how peer effect in GI affects sustainability performance, broadening the study on the impact of GI caused by various antecedents on corporate performance.