Building a green silk road is an important path toward implementation of the UN 2030 sustainable development goals. The purpose of the paper is to discuss the sustainable development goals of the “Belt and Road” Initiative (BRI) by evaluating the relationship between the BRI and enterprise green innovation. Employing the technology–organization–environment (TOE) framework to build a theoretical model based on the micro data of Chinese manufacturing enterprises from 2011 to 2018, and using the difference-in-differences method, this paper analyzes the BRI’s influence on the green innovation of enterprises. The research results indicate that the BRI has significantly enhanced the level of green innovation in Chinese manufacturing enterprises. This effect is still robust after the analysis of PSM-DID excluding the interference of policies in the same period and heterogeneity analysis. The results of the mechanism analysis show that the percentage of R&D employees, policy support and R&D expenditure can enhance the positive effects of the BRI’s influence on enterprise green innovation. The marginal contribution of this paper is to identify the causal relationship between the BRI and green innovation, add a new micro perspective to the research on the relationship between the BRI and sustainable development, and reveal a new micro mechanism.
In 2013, Chinese President Xi Jinping proposed “the Belt and Road” Initiative (BRI), which has received great attention from the international community. In 2015, China released the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” (hereinafter referred to as “the Vision”), which put forward the concept of “Building a Green Silk Road.” In 2017, China introduced the “Guidance on Promoting Green Belt and Road,” and building the Green Silk Road has become an important path toward implementation of the UN 2030 sustainable development goals (SDGs). The research literature points out that sustainability has become a major concern for the business community and that companies that are successful in environmentally sustainable projects can obtain greater financial success and social welfare beyond their economic responsibility. Studies on the BRI have also paid extensive attention to environmental and sustainable development issues, with the literature discussing sustainable growth, energy consumption and environmental challenges in the “Belt and Road” countries, carbon emission reduction in the “Belt and Road” countries, and the energy intensity of the BRI and the countries along the” Belt and Road”. However, there is a lack of research on the relationship between the BRI and sustainable development that considers the enterprise level to discuss the impact of the BRI on green innovation in enterprises, especially manufacturing enterprises.
Green innovation is critical to both organizations and society as an important factor in maintaining environmental stewardship and sustainable development. This importance is reflected in two aspects. On the one hand, in order to face the threat posed by environmental degradation to human society, many organizations and communities have adopted green innovation as a strategy to achieve environmental protection and economic growth, which is important for both organizations and society in terms of sustainability and economic profitability. On the other hand, from the perspective of the impact of green innovation on enterprises, green innovation can lead organizations to achieve a sustainable competitive advantage and further enhance regional sustainability. The research on corporate green innovation has been conducted from three perspectives as follows: (1) Studies on the factors influencing enterprise green innovation have argued that, as a systemic project, enterprise green innovation requires the creative integration of various internal and external resources. They achieve this through capacity development and capital investment, the technological capabilities of firms, firm heterogeneity, and environmental pressures, which have been identified as the main factors influencing enterprise green innovation. (2) Results of enterprise green innovation. Green innovation in enterprises can reduce energy consumption and pollution, improve resource-use efficiency, and enhance the environmental sustainability of enterprises. (3) The impacts of environmental policies on enterprise green innovation, include sustainability performance indicators, carbon trading rights, intellectual property rights and government support, etc.
However, the existing studies lack a comprehensive assessment of the promotion effect of the BRI on green innovation in Chinese manufacturing enterprises. The research gap mainly manifests in three aspects. First, the existing research mainly focuses on the relationship between the BRI and sustainable development from the national level, but there are few studies focusing on green innovation from the enterprise level. Second, existing studies have discussed the impact of policy environment on green innovation of enterprises, but there are few studies on the impact of the BRI on green innovation of enterprises. Third, in the research on the relationship between the BRI and sustainable development, the research focusing on green innovation in manufacturing needs further in-depth discussion.
The focus on green innovation in manufacturing enterprises is based on three main factors: (1) Manufacturing is one of the major causes of industrial waste production and environmental pollution, posing a threat to environmental sustainability, and enhancing the green innovation capacity of manufacturing enterprises is an important strategic tool to ensure environmental sustainability. As the Green Silk Road is an important path toward implementing the UN 2030 Agenda for Sustainable Development, studying the impact of the BRI on green innovation in manufacturing enterprises can provide important theoretical support for the realization of the SDGs of the BRI. Therefore, studying the impact of the BRI on green innovation in manufacturing enterprises can provide important theoretical support for achieving the SDGs of the BRI. (2) Consumers, manufacturers, government departments, and communities are increasingly aware of the importance of sustainability as well as environmental issues, which has created significant social pressure on manufacturing firms, prompting manufacturing firms to incorporate green innovation into their production processes, and the growing concern for social, economic, and environmental concerns has increased the importance of green innovation in manufacturing firms. (3) Manufacturing is one of the wide-ranging and dynamic industries that are attracting companies to transition toward green innovation. The BRI proposed the concept of supporting major industrial sectors to promote environmental technology innovation, providing an opportunity to study the impact of the BRI on green innovation of manufacturing enterprises.
Building the Green Silk Road is an important concept of the BRI. In 2019, China signed a memorandum of understanding with the United Nations Environment Program on building a green Belt and Road and signed cooperation agreements on ecological and environmental protection with more than 30 countries along the route. The construction of the Green Silk Road has become an important path toward implementing the UN 2030 Agenda for Sustainable Development, and more than 100 partners from relevant countries and regions have jointly established the International Alliance for Green Development along the Belt and Road. Studies have found that the BRI reduces carbon emissions and energy intensity and promotes sustainable development in the countries along the route.
Recent studies have focused on the relationship between the BRI and carbon emission reduction, sustainable development, energy intensity, and green total factor productivity. Country-based studies have found that Chinese outward foreign direct investment (OFDI) helps increase the capacity efficiency of countries along the Belt and Road, thereby reducing their carbon emissions. Rauf et al. analyzed the interrelationships among energy consumption, economic growth, population growth, financial development, and carbon emissions in 65 countries along the “Belt and Road” and found that energy consumption, high-tech industries, and economic growth deteriorated environmental quality, while financial and renewable energy consumption had a favorable impact on the environment. A study on the relationship between the BRI and energy intensity found that, under the premise of reducing energy intensity, the scale of trade between China and countries along the “Belt and Road” contributes to the convergence rate of energy intensity when the trade threshold is exceeded, and technology effects will accelerate the convergence of energy intensity. A study at the provincial level in China found that the BRI increased green total factor productivity in the provinces along the route and that technological progress played a major driving role. These studies provide preliminary evidence on the relationship between the “Belt and Road” and green development at the macro level. At the micro level, studies have also begun to discuss the relationship between green innovation of enterprises along the “Belt and Road.” Two recent studies have found that firms investing in Belt and Road countries have higher green innovation performance than other firms.
According to the analysis in the theoretical framework section, the quality of the workforce can be a key element in measuring technological infrastructure and capabilities, and in the TOE framework, the technological dimension is crucial for firm innovation because it determines the technological changes that can be made at the firm level). The value of a technological resource depends to a large extent on the extent to which it works in concert with other technologies being used and facilitates green innovation activities. The quality of the workforce as a technological resource affects firm innovation performance, and skilled employees such as R&D staff are an important knowledge resource for the firm because they carry the firm’s knowledge and culture to the greatest extent and have the potential to improve the firm’s ability to identify, absorb, and manage knowledge and thus promote innovation in the firm. Based on the above discussion, we believe that the higher the percentage of R&D employees, the stronger the contribution of the BRI to enterprises green innovation.
According to the TOE framework, organizational capabilities are also an important factor influencing firm innovation, where innovation capabilities help firms enhance their green innovation, while absorptive capacity theory emphasizes R&D importance, arguing that R&D is a driving factor that affects firms’ innovation capabilities. The impact of R&D on firm innovation in the context of the BRI has also received extensive attention in the literature, and these studies have found that the BRI promotes foreign direct investment in R&D by Chinese firms, which in turn leads to an increase in firm innovation efficiency. Companies that actively participate in the BRI are able to acquire green technologies for cash through foreign direct investment and cross-border mergers and acquisitions, thus promoting the green R&D capabilities of enterprises. The BRI enhances the R&D efficiency of enterprises, thus promoting their green upgrading and transformation.
This paper assesses the impact of the BRI on green innovation in Chinese manufacturing firms and therefore focuses more on the role of external environmental factors at the governmental level. Environmental factors are the external factors that influence firms’ innovation in the TOE framework, among which government support is one of the external environmental factors that influence firms’ innovation. The focus of cooperation in the BRI involves economic, cultural, political, and transportation areas, which are included in the policy communication, facility connection, trade flow, financial integration, and people-to-people communication proposed in the Vision. The “five links” are the main cooperation elements of the “Belt and Road,” among which policy communication is the most basic link and plays a fundamental role. In China, local governments along the Belt and Road will help enterprises better participate in the construction of the Belt and Road by introducing relevant support policies and improving the local policy environment. It was found that policy support from local governments along the BRI enhanced the export quality of enterprises in core cities along the BRI. In addition, government subsidies, as a kind of government-supported institutional arrangement, also play a significant role in enterprises’ production and operation, based on which we infer that support from local governments will enhance the green innovation level of manufacturing enterprises through the BRI.
Based on the core cities along the Belt and Road, we use the difference-in-differences method to identify the causal relationship between the BRI and the green innovation of Chinese manufacturing enterprises and analyze the impact mechanism. Through empirical analysis, we found that (1) the BRI has a significant promotion effect on the green innovation of Chinese manufacturing enterprises. The BRI has significantly increased the number of green invention applications by manufacturing enterprises in core cities along the route, and there is also a significant promotion effect in the total number of green patents (the sum of green invention applications and green inventions obtained), which remains robust after the propensity score matching difference-in-differences analysis, excluding contemporaneous policy interference and heterogeneity analysis. (2) In the benchmark regression, the BRI has a marginally significant impact on the amount of green inventions obtained by enterprises after controlling for the effect of the Shanghai Free Trade Zone in the same period. (3) The results of the heterogeneity test reveal that the BRI has a more significant effect on promoting green innovation in advanced manufacturing enterprises than in traditional manufacturing industries. Compared with nonstate-owned enterprises, the promotion effect of the BRI on the green innovation of state-owned enterprises is more significant. (4) The mechanism analysis shows that the TOE framework explains the impact mechanism of the BRI on green innovation in Chinese manufacturing firms. The BRI has led companies in the core cities to increase their focus on skilled employees, and through the knowledge they bring to the table, the BRI has had an enhanced effect on green innovation in Chinese manufacturing companies. The BRI has prompted enterprises in the core cities to increase their R&D expenditures and enhance their innovation capabilities by strengthening R&D, which has enhanced the green innovation effect of the BRI on Chinese manufacturing enterprises. The BRI has strengthened government support for enterprises by increasing subsidies for enterprises, which has enhanced the effect of the BRI in promoting green innovation in Chinese manufacturing enterprises.
Taken from Xin Cao, Feng Zhao, Yuanyuan Wang, Yin Deng, Heng Zhang and Xiaozhi Huang on May 10 2023 for Frontiers in Ecological Evolution. Image