Climate change dynamics and its irregular behavior has been recognized and documented by scientists. However, little is known about how this dynamic process of climate change affects firms’ green innovation, as the debate surrounding how climate change’s impact on business often centers on the effects of static climatic events. This study disentangles the dynamic process of climate change into two dimensions—speed and irregularity. Based on the attention-based view, we argue that the speed of climate change positively influences firms’ green innovation, while the irregularity of climate negatively impacts it. In addition, we propose that these relationships are contingent on firms’ state ownership. Tests on a sample of Chinese listed firms with 47,265 observations spanning the 2000–2022 period support this framework.
AddoumJ. M.NgD. T.Ortiz-BobeaA. (2020). Temperature shocks and establishment sales. The Review of Financial Studies, 33(3), 1331–1366.
2.
AdgerW. N.AgrawalaS.MirzaM.CondeC.O’BrienK.PulhinJ.PulwartyB. SmitTakahashiK. (2007). Assessment of adaptation practices, options, constraints and capacity. In ParryM.CanzianiO.PalutikofJ.Van der LindenP.HansonC. (Eds.), Climate change 2007: Impacts, adaptation and vulnerability. Contribution of working group II to the fourth assessment report of the Intergovernmental Panel on Climate Change (pp. 717–743). Cambridge University Press.
3.
AgrawalA.KnoeberC. R. (2001). Do some outside directors play a political role?The Journal of Law and Economics, 44(1), 179–198.
4.
AguileraR.DuranP.HeugensP. P. M. A. R.SauerwaldS.TurtureaR.VanEssenM. (2021). State ownership, political ideology, and firm performance around the world. Journal of World Business, 56(1), 101113.
5.
AhlstromD.BrutonG. D.YehK. S. (2008). Private firms in China: Building legitimacy in an emerging economy. Journal of World Business, 43(4), 385–399.
6.
AhujaG.LampertC. M.TandonV. (2008). Moving beyond Schumpeter: Management research on the determinants of technological innovation. The Academy of Management Annals, 2(1), 1–98.
7.
Albala-BertrandJ. M. (2000). Complex emergencies versus natural disasters: An analytical comparison of causes and effects. Oxford Development Studies, 28(2), 187–204.
8.
AlbitarK.Al-ShaerH.LiuY. S. (2023). Corporate commitment to climate change: The effect of eco-innovation and climate governance. Research Policy, 52(2), 104697.
9.
AlcácerJ.GittelmanM.SampatB. (2009). Applicant and examiner citations in US patents: An overview and analysis. Research Policy, 38(2), 415–427.
10.
AllredB. B.ParkW. G. (2007). The influence of patent protection on firm innovation investment in manufacturing industries. Journal of International Management, 13(2), 91–109.
11.
AmoreM. D.BennedsenM. (2016). Corporate governance and green innovation. Journal of Environmental Economics and Management, 75, 54–72.
12.
AnejaR.YadavM.GuptaS. (2024). The dynamic impact assessment of clean energy and green innovation in realizing environmental sustainability of G-20. Sustainable Development, 32(3), 2454–2473.
13.
AuffhammerM.AroonruengsawatA. (2011). Simulating the impacts of climate change, prices and population on California’s residential electricity consumption. Climatic Change, 109(1), 191–210.
14.
BaS.LisicL. L.LiuQ.StallaertJ. (2013). Stock market reaction to green vehicle innovation. Production and Operations Management, 22(4), 976–990.
15.
BäckstrandK. (2008). Accountability of networked climate governance: The rise of transnational climate partnerships. Global Environmental Politics, 8(3), 74–102.
16.
BaiC. E.XuL. C. (2005). Incentives for CEOs with multitasks: Evidence from Chinese state-owned enterprises. Journal of Comparative Economics, 33(3), 517–539.
17.
BakosJ.SiuM.OrengoA.KasiriN. (2020). An analysis of environmental sustainability in small & medium-sized enterprises: Patterns and trends. Business Strategy and the Environment, 29(3), 1285–1296.
18.
BammensY.HünermundP. (2020). Nonfinancial considerations in eco-innovation decisions: The role of family ownership and reputation concerns. Journal of Product Innovation Management, 37(5), 431–453.
19.
BanalievaE. R. (2014). Embracing the second best? Synchronization of reform speeds, excess high discretion slack, and performance of transition economy firms. Global Strategy Journal, 4(2), 104–126.
20.
BanalievaE. R.Cuervo-CazurraA.SarathyR. (2018). Dynamics of pro-market institutions and firm performance. Journal of International Business Studies, 49, 858–880.
21.
BanalievaE. R.EddlestonK. A.ZellwegerT. M. (2015). When do family firms have an advantage in transitioning economies? Toward a dynamic institution-based view. Strategic Management Journal, 36(9), 1358–1377.
22.
BarnettM. L. (2008). An attention-based view of real options reasoning. Academy of Management Review, 33(3), 606–628.
23.
BesleyT.DewatripontM.GurievS. (2010). Transition and transition impact: A review of the concept and implications for the EBRD. Report for the EBRD’s Office of the Chief Economist. European Bank for Reconstruction and Development.
24.
BledaM.KrullE.PinkseJ.ChristodoulouE. (2023). Organizational heuristics and firms’ sensemaking for climate change adaptation. Business Strategy and the Environment, 32(8), 6124–6137.
25.
BorisovaG.FotakV.HollandK.MegginsonW. L. (2015). Government ownership and the cost of debt: Evidence from government investments in publicly traded firms. Journal of Financial Economics, 118(1), 168–191.
26.
BoubakriN.GuedhamiO.KwokC. C.SaffarW. (2016). National culture and privatization: The relationship between collectivism and residual state ownership. Journal of International Business Studies, 47, 170–190.
27.
BrielmaierC.FrieslM. (2023). The attention-based view: Review and conceptual extension towards situated attention. International Journal of Management Reviews, 25(1), 99–129.
28.
BurkeM.HsiangS. M.MiguelE. (2015). Global non-linear effect of temperature on economic production. Nature, 527(7577), 235–239.
29.
CaoM.WeiJ. (2005). Stock market returns: A note on temperature anomaly. Journal of Banking & Finance, 29(6), 1559–1573.
ChanC. M.DuJ. (2021). The dynamic process of pro-market reforms and foreign affiliate performance: When to seek local, subnational, or global help?Journal of International Business Studies, 52(9), 1854–1870.
32.
ChoC. H.MartensM. L.KimH.RodrigueM. (2011). Astroturfing global warming: It isn’t always greener on the other side of the fence. Journal of Business Ethics, 104, 571–587.
33.
ChoC. H.PattenD. M. (2007). The role of environmental disclosures as tools of legitimacy: A research note. Accounting, Organizations and Society, 32(7), 639–647.
34.
ChoiD.GaoZ.JiangW. (2020). Attention to global warming. The Review of Financial Studies, 33(3), 1112–1145.
35.
ClaasenC.RoloffJ. (2012). The link between legitimacy and responsibility. The case of DeBeers in Namibia. Journal of Business Ethics, 107(3), 379–398.
36.
ClementV.RiveraJ. (2017). From adaptation to transformation: An extended research agenda for organizational resilience to adversity in the natural environment. Organization & Environment, 30(4), 346–365.
37.
CuiL.JiangF. (2012). State ownership effect on firms’ FDI ownership decisions under institutional pressure: A study of Chinese outward-investing firms. Journal of International Business Studies, 43, 264–284.
38.
CyertR.MarchJ. (1963). A behavioral theory of the firm. Prentice-Hall.
39.
DaddiT.TodaroN. M.De GiacomoM. R.FreyM. (2018). A systematic review of the use of organization and management theories in climate change studies. Business Strategy and the Environment, 27(4), 456–474.
40.
DechezleprêtreA.FankhauserS.GlachantM.StoeverJ.TouboulS. (2020). Invention and global diffusion of technologies for climate change adaptation: A patent analysis. The World Bank.
41.
DellM.JonesB. F.OlkenB. A. (2009). Temperature and income: Reconciling new cross-sectional and panel estimates. American Economic Review, 99(2), 198–204.
42.
DellM.JonesB. F.OlkenB. A. (2014). What do we learn from the weather? The new climate-economy literature. Journal of Economic Literature, 52(3), 740–798.
43.
DelmasM. A.ToffelM. W. (2008). Organizational responses to environmental demands: Opening the black box. Strategic Management Journal, 29(10), 1027–1055.
44.
DiffenbaughN. S.SinghD.MankinJ. S.HortonD. E.SwainD. L.ToumaD.CharlandA.LiuY.HaugenM.TsiangM.RajaratnamB. (2017). Quantifying the influence of global warming on unprecedented extreme climate events. Proceedings of the National Academy of Sciences United States of America, 114(19), 4881–4886.
45.
DuanH.YuanD.CaiZ.WangS. (2022). Valuing the impact of climate change on China’s economic growth. Economic Analysis and Policy, 74, 155–174.
46.
DurandR.HawnO.IoannouI. (2019). Willing and able: A general model of organizational responses to normative pressures. Academy of Management Review, 44(2), 299–320.
47.
FalknerR. (2016). The Paris Agreement and the new logic of international climate politics. International Affairs, 92(5), 1107–1125.
48.
FisherA. C.HanemannW. M.RobertsM. J.SchlenkerW. (2012). The economic impacts of climate change: Evidence from agricultural output and random fluctuations in weather: Comment. American Economic Review, 102(7), 3749–3760.
49.
FosterA.WissmanN.BrayL. A.DeBoerJ.ErgeneS.StewartO. J.DunhamI. M. (2024). Rising to the challenge: Embedding environmental justice in management and organization studies. Organization & Environment, 37(2), 159–193.
50.
GalbreathJ. (2011). To what extent is business responding to climate change? Evidence from a global wine producer. Journal of Business Ethics, 104(3), 421–432.
51.
GalbreathJ.CharlesD.OczkowskiE. (2016). The drivers of climate change innovations: Evidence from the Australian wine industry. Journal of Business Ethics, 135(2), 217–231.
52.
GoldsteinA.TurnerW. R.GladstoneJ.HoleD. G. (2019). The private sector’s climate change risk and adaptation blind spots. Nature Climate Change, 9(1), 18–25.
53.
GordonK. (2014). Risky business: The economic risks of climate change in the United States. A climate risk assessment for the United States. Risky Business Project.
54.
Graff ZivinJ.NeidellM. (2014). Temperature and the allocation of time: Implications for climate change. Journal of Labor Economics, 32(1), 1–26.
55.
GrantR. M.JammineA. P.ThomasH. (1988). Diversity, diversification, and profitability among British manufacturing companies, 1972-1984. Academy of Management Journal, 31(4), 771–801.
56.
GreggH. R.RestubogS. L.DasboroughM.XuC.DeenC. M.HeY. (2022). When disaster strikes! An interdisciplinary review of disasters and their organizational consequences. Journal of Management, 48(6), 1382–1429.
57.
GuJ. (2021). Spatial dynamics between firm sales and environmental responsibility: The mediating role of corporate innovation. Sustainability, 13(4), 1684.
58.
HairJ. F.AndersonR. E.TathamR. L.WilliamC. (1998). Multivariate data analysis. Prentice Hall.
59.
HirshleiferD.ShumwayT. (2003). Good day sunshine: Stock returns and the weather. The Journal of Finance, 58(3), 1009–1032.
60.
HongH.LiF. W.XuJ. (2019). Climate risks and market efficiency. Journal of Econometrics, 208(1), 265–281.
61.
HsiangS. M.NaritaD. (2012). Adaptation to cyclone risk: Evidence from the global cross-section. Climate Change Economics, 3(2), 1250011.
62.
HuangH. H.KersteinJ.WangC. (2018). The impact of climate risk on firm performance and financing choices: An international comparison. Journal of International Business Studies, 49(5), 633–656.
63.
HuangH. H.KersteinJ.WangC.WuF. (2022). Firm climate risk, risk management, and bank loan financing. Strategic Management Journal, 43(13), 2849–2880.
64.
HugonA.LawK. (2019). Impact of climate change on firm earnings: Evidence from temperature anomalies. SSRN Journal, 3271386. https://doi.org/10.2139/ssrn.3271386
65.
IosifidiM.KokasS. (2015). Who lends to riskier and lower-profitability firms? Evidence from the syndicated loan market. Journal of Banking & Finance, 61, 14–21.
66.
Intergovernmental Panel on Climate Change. (2007). Climate change 2007: Impacts, adaptation and vulnerability [Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change]. Cambridge University Press.
JahnM. (2013). Economics of extreme weather events in cities: Terminology and regional impact models (HWWI research papers 143). Hamburg Institute of International Economics (HWWI).
69.
JonesB. F.OlkenB. A. (2010). Climate shocks and exports. American Economic Review, 100(2), 454–459.
70.
JosephJ.WilsonA. J. (2018). The growth of the firm: An attention-based view. Strategic Management Journal, 39(6), 1779–1800.
71.
KesidouE.DemirelP. (2012). On the drivers of eco-innovations: Empirical evidence from the UK. Research Policy, 41(5), 862–870.
72.
KimI.PantzalisC.ZhangZ. (2021). Multinationality and the value of green innovation. Journal of Corporate Finance, 69, 101996.
73.
KimY. K.OhJ. B. (2017). Examination workloads, grant decision bias and examination quality of patent office. Research Policy, 46(5), 1005–1019.
74.
KirilenkoA. P.MolodtsovaT.StepchenkovaS. O. (2015). People as sensors: Mass media and local temperature influence climate change discussion on Twitter. Global Environmental Change, 30, 92–100.
75.
KolkA.PinkseJ. (2008). A perspective on multinational enterprises and climate change: Learning from “an inconvenient truth”?Journal of International Business Studies, 39(8), 1359–1378.
76.
KoubiV. (2019). Climate change and conflict. Annual Review of Political Science, 22, 343–360.
77.
KreftS.EcksteinD. (2014). Global climate risk index 2014. Germanwatch.
78.
LeeS. Y. (2012). Corporate carbon strategies in responding to climate change. Business Strategy and the Environment, 21(1), 33–48.
LevinthalD. A.MarchJ. G. (1993). The myopia of learning. Strategic Management Journal, 14(S2), 95–112.
81.
LevinthalD. A.RerupC. (2006). Crossing an apparent chasm: Bridging mindful and less-mindful perspectives on organizational learning. Organization Science, 17(4), 502–513.
82.
LiJ.PanY.YangY.TseC. H. (2022). Digital platform attention and international sales: An attention-based view. Journal of International Business Studies, 53(8), 1817–1835.
83.
LiJ.TangY. (2010). CEO hubris and firm risk taking in China: The moderating role of managerial discretion. Academy of Management Journal, 53(1), 45–68.
84.
LinB.ZhuJ. (2019). The role of renewable energy technological innovation on climate change: Empirical evidence from China. Science of the Total Environment, 659, 1505–1512.
85.
LinD.ZhaoY. (2023). The impact of environmental regulations on enterprises’ green innovation: The mediating effect of managers’ environmental awareness. Sustainability, 15(14), 10906.
86.
LinnenlueckeM. K.GriffithsA.WinnM. I. (2012). Extreme weather events and the critical importance of anticipatory adaptation and organizational resilience in responding to impacts. Business. Strategy and the Environment, 21, 17–32.
87.
LinnenlueckeM. K.StathakisA.GriffithsA. (2011). Firm relocation as adaptive response to climate change and weather extremes. Global Environmental Change, 21(1), 123–133.
88.
LounsburyM. (2001). Institutional sources of practice variation: Staffing college and university recycling programs. Administrative Science Quarterly, 46(1), 29–56.
89.
MaX.DingZ.YuanL. (2016). Subnational institutions, political capital, and the internationalization of entrepreneurial firms in emerging economies. Journal of World Business, 51(5), 843–854.
90.
MaY.FengG. F.ChangC. P. (2024). From traditional innovation to green innovation: How an occurrence of natural disasters influences sustainable development?Sustainable Development, 32(3), 2779–2796.
91.
MohaddesK.NgR. N.PesaranM. H.RaissiM.YangJ. C. (2023). Climate change and economic activity: Evidence from US states. Oxford Open Economics, 2, odac010.
92.
MooreF. C.ObradovichN.LehnerF.BaylisP. (2019). Rapidly declining remarkability of temperature anomalies may obscure public perception of climate change. Proceedings of the National Academy of Sciences United States of America, 116(11), 4905–4910.
NordhausW. D. (2006). Geography and macroeconomics: New data and new findings. Proceedings of the National Academy of Sciences United States of America, 103(10), 3510–3517.
95.
Novy-MarxR. (2014). Predicting anomaly performance with politics, the weather, global warming, sunspots, and the stars. Journal of Financial Economics, 112(2), 137–146.
96.
NybergD.FernsG.VachhaniS.WrightC. (2022). Climate change, business, and society: Building relevance in time and space. Business & Society, 61(5), 1322–1352.
97.
OcasioW. (1997). Towards an attention-based view of the firm. Strategic Management Journal, 18(S1), 187–206.
PielkeR. A.Jr. (2004). What is climate change?Energy & Environment, 15(3), 515–520.
100.
PiersonP. (2000). The limits of design: Explaining institutional origins and change. Governance, 13(4), 475–499.
101.
PinkseJ.GasbarroF. (2019). Managing physical impacts of climate change: An attentional perspective on corporate adaptation. Business & Society, 58(2), 333–368.
102.
QuanX.KeY.QianY.ZhangY. (2021). CEO foreign experience and green innovation: Evidence from China. Journal of Business Ethics, 182, 535–557.
103.
RenS.HuangM.LiuD.YanJ. (2023). Understanding the impact of mandatory CSR disclosure on green innovation: Evidence from Chinese listed firms. British Journal of Management, 34(2), 576–594.
SeppanenO.FiskW. J.FaulknerD. (2003). Cost benefit analysis of the night-time ventilative cooling in office building [Working paper]. Helsinki University of Technology.
106.
SiscoM. R.BosettiV.WeberE. U. (2017). When do extreme weather events generate attention to climate change?Climatic Change, 143(1), 227–241.
107.
SolomonS.PlattnerG. K.KnuttiR.FriedlingsteinP. (2009). Irreversible climate change due to carbon dioxide emissions. Proceedings of the National Academy of Sciences United States of America, 106(6), 1704–1709.
108.
TanabeS. I.IwahashiY.TsushimaS.NishiharaN. (2013). Thermal comfort and productivity in offices under mandatory electricity savings after the Great East Japan earthquake. Architectural Science Review, 56(1), 4–13.
109.
TembataK.TakeuchiK. (2019). Floods and exports: An empirical study on natural disaster shocks in Southeast Asia. Economics of Disasters and Climate Change, 3, 39–60.
110.
ThelenK. (2000). Timing and temporality in the analysis of institutional evolution and change. Studies in American Political Development, 14(1), 101–108.
111.
ThelenK. (2009). Institutional change in advanced political economies. British Journal of Industrial Relations, 47(3), 471–498.
112.
TodaroN. M.TestaF.DaddiT.IraldoF. (2021). The influence of managers’ awareness of climate change, perceived climate risk exposure and risk tolerance on the adoption of corporate responses to climate change. Business Strategy and the Environment, 30(2), 1232–1248.
113.
UnterK. M. M.ParkS.RiveraJ. (2024). Business response strategies to climate change: An integrative and research frontiers outlook. Organization & Environment, 37(2), 325–357.
114.
VenturiniA. (2022). Climate change, risk factors and stock returns: A review of the literature. International Review of Financial Analysis, 79, 101934.
115.
WalkerJ. T. (2018). The influence of climate change on waterborne disease and Legionella: A review. Perspectives in Public Health, 138(5), 282–286.
116.
WangH.LiJ. (2008). Untangling the effects of overexploration and overexploitation on organizational performance: The moderating role of environmental dynamism. Journal of Management, 34(5), 925–951.
117.
WangH.LiuJ. Z.ZhangL. H. (2022). Carbon emissions and asset pricing—Evidence from Chinese listed companies. China Journal of Economic, 9(2), 28–75.
118.
WangY.FaragH.AhmadW. (2021). Corporate culture and innovation: A tale from an emerging market. British Journal of Management, 32(4), 1121–1140.
119.
WeberE. U. (2010). What shapes perceptions of climate change?WIREs Climate Change, 1(3), 332–342.
120.
WhorfB. L. (1956). Language, thought, and reality: Selected writings of Benjamin Lee Whorf (CarrollJ. B., Ed.). The MIT Press.
121.
WinnM.KirchgeorgM.GriffithsA.LinnenlueckeM. K.GüntherE. (2011). Impacts from climate change on organizations: A conceptual foundation. Business Strategy and the Environment, 20(3), 157–173.
122.
WrightC.NybergD. (2017). An inconvenient truth: How organizations translate climate change into business as usual. Academy of Management Journal, 60(5), 1633–1661.
123.
XuD.MeyerK. E. (2013). Linking theory and context: “Strategy research in emerging economies” after Wright et al. (2005). Journal of Management Studies, 50(7), 1322–1346.
124.
YuS.ZhengY.HuX. (2022). How does climate change affect firms’ investment efficiency? Evidence from China’s listed renewable energy firms. Business Strategy and the Environment, 32(6), 3977–3996.
125.
ZavalL.KeenanE. A.JohnsonE. J.WeberE. U. (2014). How warm days increase belief in global warming. Nature Climate Change, 4(2), 143–147.
126.
ZhaoY.LiuY.DongL.SunY.ZhangN. (2024). The effect of climate change on firms’ debt financing costs: Evidence from China. Journal of Cleaner Production, 434, 140018.
