Would Customers Pay to Go Green: The Impact of Green Innovation on Corporate Value in Chinese Context

Understanding how firms translate environmental innovation into financial value through customer engagement is a critical global sustainability challenge. In response, this paper investigates the impact of green innovation on green income (revenue from eco-products or low-carbon business activities) in China’s corporate landscape. Focusing on the customer value creation mechanism, we employ rigorous identification strategies to analyze a sample of Shanghai and Shenzhen A-share listed companies from 2010 to 2020. Our findings reveal that green innovation significantly enhances green income, confirming customers financially reward sustainability initiatives. We further find that marketing capabilities amplify this effect, while firm-level heterogeneity tests show stronger impacts when firms’ agency costs are low, boards have environmental background, and products are differentiated; and provincial heterogeneity reveals the effect more pronounced in regions with advanced factor markets, market intermediary maturity, and legal system development. This study contributes to stakeholder theory by demonstrating customers’ role as active value co-creators and provides a granular, multi-tier analysis that advances both green innovation literature and sustainable value creation frameworks. JEL Classification: L1 M31 N3 O32 Q01