The road to green innovation in agriculture: the impact of green agriculture demonstration zone on corporate green innovation

Agricultural green transformation is crucial for addressing environmental issues like pollution and soil degradation. However, limited attention has been given to its determinants in the existing literature. This study extends the "Porter hypothesis" in agricultural economics and discusses the institutional factors influencing green transformation in Chinese agricultural enterprises from the perspective of environmental regulations. Using data from 2007 to 2020, we examine the impact of the green agriculture demonstration zone (GADZ) policy on green innovation in Chinese A-share listed agribusinesses. The results show that the policy significantly improves green innovation, leading to a 9.9% increase in patent applications. We also find that the GADZ promotes green innovation in agricultural businesses through two economic mechanisms, reducing financial risks and enhancing media attention. In addition, the policy's effect is influenced by property rights, information disclosure quality, and financial resources. Our findings offer valuable insights for promoting green innovation and high-quality agricultural development in emerging economies.