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Informal institutions play an important role in corporate green transformation. Based on institutional theory, this study explored the impact of social trust on firms’ environmental innovation, as well as the mediating role of green commitments and the moderating role of customer geographic distance. Using a sample of 637 listed firms on the Shanghai and Shenzhen stock markets in China from 2010 to 2021, we tested our hypothesis with a fixed-effects model. Social trust had a positive impact on firms’ environmental innovation, and green commitments played a mediating role in the relationship between social trust and firms’ environmental innovation. Customers’ geographic distance played a positive moderating role in the impact of social trust on firms’ environmental innovation. This study provides a new perspective for understanding the driving factors of firms’ environmental innovation and expands the application of informal institutional theory.
Liao et al. (Fri,) studied this question.