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Can digitalization break the political resource curse? A study on political connections and corporate green
Neng Shen1, Lin Zhang1, Hao Huang2
1School of Economics and Management, Fuzhou University, Fuzhou, 350018, China.
Abstract:
Digitalization and greening are inexorable trends in enterprise development today. Based on data from Chinese listed companies from 2008 to 2020, this study examines the relationship between political connections and firms' green innovation, exploring whether digitalization can break the political resource curse and promote green innovation. We find that political connections hinder firms' green innovation, indicating the existence of the political resource curse. Our moderating effect analysis shows that the higher the degree of digitalization of firms, the more significant the decrease in the negative effect of political connections on green innovation, thereby breaking the political resource curse. Heterogeneity analysis shows that the positive moderating effect of digitalization is higher on private firms and firms with more redundant resources. Finally, mechanistic analysis indicates that political connections hinder firms' green innovation by reducing operational efficiency.
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