Managerial Short-termism, Corporate Social Responsibility and Green Innovation: Empirical Evidence from China

Green innovation is key to promoting green development and all-round green transformation. Businesses are the backbone of green innovation. The Upper Echelons Theory tells us that the characteristics of managers can influence critical business decisions and therefore have an essential impact on green innovation strategies. Existing literature has discussed the impact of objective characteristics of managers on green innovation. However, there is little literature on the impact of managerial short-termism on green innovation in terms of its psychological characteristics. Based on the Time Orientation Theory, we believe that a manager's long-term vision is a booster for green innovation, while short-termism inhibits it. To test our idea, we perform a systematic analysis. Based on a theoretical analysis of the relationship between managerial short-termism and green innovation, we also demonstrate our hypothesis using quantitative analysis. Quantitative analysis finds that managerial short-termism does inhibit green innovation and remains true after robustness tests. We also find that the negative impact of managerial short-termism on green innovation is greater in samples with severe financing constraints and greater managerial power. And, in the mediation effect test, we demonstrate that managerial short-termism can influence green innovation by influencing CSR awareness. Finally, we performed an ecological consequence test and found that managerial short-termism ultimately leads to an increase in future carbon emissions in the city where the firm is located. The study enriched research on managerial short-termism and green innovation and provided influential references for subsequent research.