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. 2023 Feb 10;20(4):3119.
doi: 10.3390/ijerph20043119.

The Connection between Absorptive Capacity and Green Innovation: The Function of Board Capital and Environmental Regulation

Sohail Ahmad Javeed  1 , Boon Heng Teh  2 , Tze San Ong  3   4 , Nguyen Thi Phuong Lan  2 , Saravanan Muthaiyah  2 , Rashid Latief  5
Affiliations

The Connection between Absorptive Capacity and Green Innovation: The Function of Board Capital and Environmental Regulation

Sohail Ahmad Javeed et al. Int J Environ Res Public Health. .

Abstract

The stress of environmental regulations, sustainable development objectives, and global warming is becoming more prominent now. Most studies conclude that the industrial sector is largely at fault and under tremendous pressure to address these climate change issues. This study highlights the significance of green innovation to Chinese firms in mitigating these conservational challenges, and the study probes the association between green innovation and absorptive capacity. Additionally, board capital (the social and human capital of directors) and environmental regulation-both drivers of green innovation-are explored as moderators between green innovation and absorptive capacity. With appropriate econometric methods and theoretical support from the natural resource-based review, the resource dependency theory, and the Porter hypothesis, the results indicate the positive relationship between green innovation and absorptive capacity. They also reveal board capital and environmental regulation as positive moderators, emphasizing their significance to green innovation. This study offers several suggestions and directives for stakeholders, such as businesses, policymakers, and governments, to foster green innovation for greater profitability, minimizing negative industrial consequences.

Keywords: absorptive capacity; board capital; environmental regulations; green innovation.

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Conflict of interest statement

The authors declare no conflict of interest.

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