Green Innovation and Export Performance in Emerging Market Firms: A Legitimacy-based View

Abstract

Whereas emerging market firms (EMFs) face severe legitimacy barriers when entering global markets, whether and under what conditions green innovation can help them gain legitimacy remains under-examined. This article argues that green innovation can help EMFs obtain regulatory and social legitimacy in host countries and consequently boost their exports. Based on a panel dataset populated by 254 Chinese-listed manufacturing companies from 2011 through 2017, this article finds that green innovation is positively associated with EMF export performance. Moreover, this positive relationship is stronger when host-country political risk is lower or host-country buyer sophistication is higher but becomes weaker for state-owned EMFs. These findings enrich the legitimacy-based view and international business literature by identifying the role of green innovation in boosting EMF export performance and specifying important institutional contingencies.