Promoting green innovation: The pivotal role of government environmental information disclosure

Abstract

Government environmental information disclosure is pivotal for fostering a participatory environmental governance system; however, its effectiveness in promoting firm-level green innovation remains insufficiently understood. This study examines such disclosure as a soft regulatory institutional mechanism influencing corporate green innovation. Drawing on a novel city-level disclosure index derived from government transparency reports, we assess its impact on both strategic and substantive green innovation among Chinese firms. The effects are particularly pronounced for firms with weak political ties or executive teams lacking environmental expertise, highlighting that responsiveness to policy signals is contingent upon firms’ environmental sensitivity. Mechanism analysis reveals that environmental information disclosure enhances green innovation primarily by activating public environmental concern, thereby increasing external institutional pressure. Moreover, the effectiveness of disclosure exhibits notable heterogeneity. At the regional level, stronger impacts are observed in economically advanced regions with stringent environmental regulation. At the industry level, the effect is amplified in pollution-intensive sectors and industries with high market concentration. At the firm level, state-owned enterprises and firms with a strong corporate social responsibility (CSR) orientation demonstrate greater receptivity to disclosure initiatives. These findings underscore the governance value of transparency and offer actionable insights for policymakers seeking to develop adaptive, information-based environmental governance frameworks that utilize soft regulatory tools to facilitate sustainable corporate transformation.

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