Information transparency of government environmental supervision and corporate green innovation in Chinese highly polluting sectors

To address the research problem of how the disclosure of government environmental supervision information impacts collaborative governance in enhancing corporate green innovation, this study evaluates the efficacy of such disclosures within the Chinese context. Utilizing data from the Pollution-Information-Transparency-Index (PITI) at the municipal level and focusing on A-share listed firms in major polluting sectors, our research examines the effect of environmental supervision information transparency on green innovation. Our findings demonstrate that the information transparency in government environmental supervision significantly promotes eco-friendly enterprise innovation. Specifically, when the information transparency of government environmental supervision in a company's location increases by 1%, there is a 0.4% rise in the company's green invention patent applications. This positive correlation remains robust even after controlling for endogeneity, refining variable definitions, and adjusting the sample. Heterogeneity analysis indicates that the effect of government environmental supervision information disclosure on regional corporate green innovation is particularly pronounced in large-scale, state-owned corporates, and those with strong environmental performance. Further investigation into the mechanisms reveals that the disclosure of government environmental supervision information stimulates corporate green innovation through various channels, such as reducing information asymmetry, facilitating stakeholder involvement in environmental governance, influencing the formulation of green development strategies, and enhancing access to external financial resources.