Exploration or Exploitation? Corporate Green Innovation Strategy for Carbon Emission Reduction-Evidence from Pilot Enterprises in China

Green innovation has become a key strategy for reducing emissions. However, existing research mainly examines this phenomenon through the resource and institutional perspectives, often ignoring the changes in corporate green innovation behavior under industry peer pressure. Therefore, this study draws on the policy framework of China's carbon trading pilot and uses a multi-period difference-in-difference (DID) fixed effects model to explore how carbon trading shapes enterprises' green innovation strategies. The survey used data from pilot enterprises from 2008 to 2019 and found that carbon trading policies are conducive to green innovation, and both exploratory green innovation and exploitative green innovation have been reflected. It is worth noting that under the influence of peer pressure, this positive effect is more prominent in exploratory green innovation. Furthermore, it was found that firms facing carbon pressure can skillfully find an equilibrium between exploratory green innovation and exploitative green innovation. The research results demonstrate the green innovation strategies and trade-offs of Chinese enterprises facing the impact of carbon trading policies, with the hope that the research conclusions will have certain theoretical reference significance for future corporate green transformation and increased investment in green innovation.