Deterrent effects of central environmental protection inspection on green technology innovation cycles: Evidence from the listed state-owned firms in China

This paper analyzes the determinants of green technology innovation cycles using a panel data sample of A-share group-holding state-owned firms listed on the Shanghai and Shenzhen stock exchanges from 2014 to 2021. We assess the effects of the Central Environmental Protection Inspection (CEPI) within business groups. According to the empirical findings, if certain firms undergo the CEPI, it promotes an increase in green technology innovation in other uninspected firms within the business group. We also find that the CEPI on business groups enhances the quality of green technology innovation, promoting technological advancement and influencing the green technological cycle. Social learning and corporate knowledge spillover theories explain the mechanism for promoting green technology innovation in firms. These findings enrich research on corporate green technology innovation in China and provide insights into how policymakers promote green development.