How does CEO’s environmental awareness affect technological innovation?

Abstract

In this paper, we conduct an empirical study on the impact of CEOs’ environmental awareness on technological innovation. To this end, we obtain a large sample with 7615 observations from Chinese A-share listed firms between the years of 2003 and 2014. Our empirical results show that a CEO’s environmental awareness has a significant positive impact on technological innovation of his/her enterprise. Environmentally conscious CEOs will invest more in R&D and obtain more patents. This will help their enterprises achieve higher efficiency of technological innovation. Furthermore, the environmental awareness of a CEO has a more significant impact on technological innovation if his/her enterprise is subject to a higher level of monitoring. We also conduct robustness check of our findings and provide managerial insights and proactive government policies to raise the environmental awareness of CEOs and improve the innovation vitality of enterprises.