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Article
"STABILIZER" OR "CATALYST"? HOW GREEN TECHNOLOGY INNOVATION AFFECTS THE RISK OF STOCK PRICE CRASHES: AN ANALYSIS BASED ON THE QUANTITY AND QUALITY OF PATENTS1
Ge-zhi Wu, Da-ming You
ABSTRACT. To explore the relationship between corporate green technological innovation and the risk of stock price crashes, we first analysed the data of listed companies in China from 2008 to 2018 and constructed indicators for the quantity and quality of corporate green technology innovation. The study found that the quantity of green technology innovation is not related to the risk of stock price crashes, while the quality of green technology innovation is negatively related to the risk of stock price crashes. Second, we studied the impact of corporate ownership on the relationship between the quality of green technological innovation and the risk of stock price crashes and found that in nonstate-owned enterprises, the quality of green technological innovation is negatively correlated with the risk of a stock price collapse, while in state-owned enterprises, the quality of green technological innovation and the risk of a stock price collapse are positive and not significant. Furthermore, we studied the mediating effect of the number of negative news reports in the media of listed companies on the relationship between the quality of corporate green technology innovation and the stock price crash and found that the quality of green technology innovation is positively correlated with the number of negative news reports in the media of listed companies, while the number of negative news reports in the media of listed companies is positively correlated with the risk of a stock price collapse. Finally, we conducted a DID regression by using the impact of exogenous policy shocks on the quality of green technology innovation, and the main results passed the robustness test.
KEYWORDS: stock crash risk, quantity of green innovation, quality of green innovation, enterprise ownership, media coverage.
JEL classification: G32, O33, O34.
1Acknowledgments: Funding information: National Natural Science Foundation of China, Grant/Award Numbers: 71974209. The authors acknowledge the anonymous reviewers and editors for helpful guidance on prior versions of the article.