Do IPOs affect green innovation? Evidence from China

This study investigates the impact of going public on corporate green innovation using data on Chinese IPO firms from 2007 to 2022. We find that IPOs lead to increased green innovation, especially in firms that raise more capital, face tighter green credit constraints, and maintain strong post-IPO funding. The effect is also stronger in firms exposed to greater public scrutiny, led by environmentally aware executives, and located in regions with weaker regulatory oversight. Additionally, the positive impact of IPOs on green innovation is stronger for state-owned enterprises and firms with higher levels of executive green cognition. Further analysis shows that this increase in green innovation is associated with fewer environmental penalties and improved firm performance.