The impact of stock liquidity on green technology innovation of new energy enterprises: Evidence from China

Green technology is the solution to address the dichotomy between environmental conservation and economic growth. How to stimulate the expansion of green technology innovation output is an essential agenda highlighted by firms, governments, and environmental non-governmental organizations. This research investigates the impact of stock liquidity on green technology innovation and its mechanism, using the data of listed new energy green firms in China from 2007 to 2019. The empirical findings reveal that the enhancement of stock liquidity considerably supports the green technology innovation of new energy firms. Whereas expanding R&D investment and decreasing financial risk are two economic mechanisms that stock liquidity promotes green technology innovation of new energy firms. In addition, our study demonstrates that both government subsidies and analyst attention may strengthen the impact of stock liquidity in supporting the green innovation output of new energy enterprises. The conclusion of this article might give reference to green economic development and structural transformation of emerging economies.