Exploring the influence of green innovation, ESG performance, and corporate reputation on stock market performance: A mediated moderation perspective

The paper examines whether green innovation, ESG performance, and corporate reputation influence the stock market performance of listed firms in China. Initially, a mediated moderation analysis was performed to understand the complex dynamics between the variables using various statistical approaches such as fixed effects, feasible generalized least squares, 2SLS, and GMM. In addition, the empirical estimations used static and dynamic panel specifications to verify the results' rigor and consistency. The Hayes (Introduction to mediation, moderation, and conditional process analysis, Guilford Press, 2018) bootstrapping approach of mediated moderation analysis was also performed to cross-validate the results from other methods. The notable findings of the study are as follows. First, green innovation (GI) positively affects stock market performance and ESG performance. Second, ESG performance mediates the association between GI and stock market performance. Third, the mediated moderation analysis indicates that corporate reputation (CR) positively moderates the association between ESG performance and stock market performance, so the relationship is stronger when the firm has a good reputation. Fourth, we document evidence that CR strengthens the relationship between GI and stock market performance such that the positive relationship is stronger when a firm has a good reputation. Finally, the novel three-way interaction analysis indicates that stock market performance would improve when reputed firms with good ESG performance employ green innovation. This research adds to the existing body of knowledge by presenting unique evidence from mediated moderation analysis and three-way interaction that green innovation, ESG performance, and corporate reputation influence the stock market performance of Chinese listed firms.