Will Public Environmental Concerns Foster Green Innovation in China’s Automotive Industry? An Empirical Study Based on Multi-Sourced Data Streams

Abstract

This study explores the impact of public concerns on green innovation in China’s automotive industry and examines whether the effect varies based on firm size, ownership, and time phase. The study investigates 151 automobile enterprises and provides a novel, large-scale, and data-based perspective and estimation method for exploring critical factors of green innovation. By applying transition probabilities matrix (TPM) model, this paper finds that for different-sizes automotive enterprises there are significant differences in innovation sustainability, non-innovation sustainability, and liquidity between innovation and non-innovation, and such differences also exist for state-owned and non-state-owned enterprises. Then, based on the dynamic panel random probit (DPRP) model, the paper further analyzes the possible reasons for these differences, and particularly focuses on exploring the impact of public environmental concern on the environmental technology innovation. The empirical results show: 1) public concerns encourages green innovation emerging in all automotive firms, but only affects innovation persistence in medium and large companies. 2) public concerns encourages non-innovator state-owned companies to become innovators and motivates them to maintain continuous innovation. 3) the impact of public concerns changes over time. In the periods of 2002–2007 and 2012–2013, the role of public concerns is not significant. However, in the 2007–2012 period, public concerns significantly stimulate enterprises to move from non-innovators to innovators and promotes continuous innovation.