Green butterfly effect: how does national standardization construction promote firms’ green innovation?

The importance of standardization construction, particularly in the realm of green innovation, should not be overlooked while assessing the progress of China’s green transition. This study employs the Construction Plan for National Comprehensive Standardization Reform Pilot Policy as a quasi-natural experiment and conducts a multi-period difference-in-differences approach to examine the impact of standardization construction on firms’ green innovation, along with its underlying mechanisms and economic consequences. The research findings reveal that the standardization construction has improved the green innovation level of firms in pilot areas, and this improvement has been achieved through intensified media attention and reduced agency costs. Moreover, the effectiveness of this phenomenon in fostering green innovation is predominantly observed in firms with large-scale, maturity and higher customer concentration. Further analysis demonstrates that the standardization construction is conducive to enhancing firms’ market competitiveness. These insights enrich the literature on the determinants of firms’ green innovation and provide firm-level empirical evidence for understanding the micro-governance effects of standardization strategies. Based on the main findings, this study suggests reinforcing information disclosure requirements and external supervision mechanisms to optimize the green guiding role of standardization construction.