How does executive green cognition affect enterprise green technology innovation? The mediating effect of ESG performance

Abstract

This study uses data of Chinese A-share listed companies from 2012 to 2021 to empirically examine the impact and action mechanisms of executives' green cognition on enterprises' green technology innovation (GTI). The results of Poisson regression show that executives' green cognition have a significant effect on promoting enterprise GTI, with the conclusion remaining valid after endogenous and robustness tests. Moreover, the mechanism test indicates that executive green cognition could promote enterprise GTI by enhancing their ESG performance. Further analyses find that both government environmental regulation and executive overseas experience have strengthened the promotion effect of executive green cognition on enterprise GTI. These findings provide a new action mechanism path for the relationship between executive cognition and corporate innovation and a micro-level theoretical basis for policy recommendations for promoting enterprises’ GTI and ESG practices.

1. Introduction

To mitigate global warming, many countries have committed to achieve carbon neutrality by the mid-21st century. China's authorities have also taken actions to achieve the goal and proposed that opening up new paths for sustainable development must adhere to green development. Green technological innovation (GTI) is an important pathway to achieve carbon neutrality and implement sustainable development as well as green development. GTI helps enterprises to reduce environmental costs and enhance environmental performance [1], stimulate new market demands, and gain long-term competitive advantages through green iterative product upgrades [2]. However, GTI requires sustained large-scale investment in technology and capital, and it is highly uncertain [3], posing strong resource constraints for enterprises. GTI has a positive externality of knowledge and technology spillover and a negative externality of environmental pollution, leading to insufficient motivation for GTI for enterprises [4,5]. Therefore, how to break through the constraints and drive enterprises' GTI is an important issue, which needs to be addressed.

Existing literature has explored the factors affecting enterprise GTI, focusing on external factors such as digital economy [6], environmental regulation [7], and environmental tax policy [8]. They have played a driving role in corporate GTI. However, with the influence of external factors, how to combine internal factors to promote independent innovation of green technology is the key. Therefore, the research focus has shifted towards internal corporate governance. Executives are top-down initiators of corporate innovation, and their individual characteristics affect enterprises GTI. According to the upper echelon theory, existing studies have showed that CEO personality traits such as openness [9,10], CEO hubris [11], executive competence [12], executive background [13], and management equity incentives [14] positively affect corporate GTI. However, these factors may not fully explain the impact of executives on green innovation because executives with the same external characteristics may make different decisions owing to cognitive differences.

Cognition could influence individual behavior [15]. Cognitive theory is introduced into the field of strategic management [16]. Subsequently, academics have conducted in-depth analyses on the role of manager cognition in enterprise strategic management [[17], [18], [19]]. Given the global advocacy of low-carbon economy and sustainable development, recent studies have focused on the impact of executives' attention to green and environmental protection. Executive environmental cognition enhances sustainable development performance in enterprises through GTI [20]. Managers' green cognition promotes the green transformation of manufacturing enterprises and plays a partial mediating role between environmental regulation and the green transformation of manufacturing enterprises [21]. Executive green awareness can improve corporate performance, with GTI serving as a mediator between executive green awareness and corporate performance [22,23]. The extant studies have discussed the mediation effect of GTI in the relationship between executive green awareness and corporate performance, yet little attention has been paid to the action mechanisms between executives' green cognition and enterprises’ GTI.

Under the goals of carbon peaking and carbon neutrality, environmental, social, and governance (ESG), as an important indicator for measuring and evaluating the sustainable development ability of enterprises [24], is paid more and more attention by investment institutions. How to improve ESG performance has been explored by extant studies from external factors and earning management [[25], [26], [27], [28]]. However, few studies have discussed on the impact of executive green cognition on ESG performance. Based on upper echelons theory and the research framework for managers' cognition-enterprise strategy-corporate performance [29], we consider that the executives' green perception could affect enterprises' ESG performance. Good ESG performance can expand financing channels for enterprise [30], gain financial support [31] and attract excellent people for GTI [32], that is, ESG may play the mediating role in the relationship between executive green cognition and enterprise GTI. However, no empirical research has been found to explore this issue. Furthermore, the shaping of executive cognitive ability could be affected by their overseas study or work experience that is seen as a process of imprinting based on the imprinting theory. Hence, does executive overseas experience influence the relationship between executive green cognition and corporate GTI? From the external factors perspective, industry regulations have impacts on executive cognition [33]. To promote the green development of enterprises, governments have implemented environmental regulatory measures to restrict corporate pollution behavior or incentivize green innovation [34,35]. How does government environmental regulation play a role in the relationship between executives’ green cognition and corporate GTI? The above issues need further discussion.

Hence, this study aims to use data from Chinese A-share listed companies in Shanghai and Shenzhen from 2012 to 2021 to empirically examine the impact of executive green cognition on corporate GTI and the mediating role of ESG in the relationship between them. Further analysis also investigates the impact of government environmental regulations and executive overseas experience on the relationship between executive green cognition and corporate GTI. The results of Poission regression shown that executives' green cognition have a significant effect on promoting corporate GTI, with the conclusion remaining valid after endogenous and robustness tests. Additionally, the estimated results of a stepwise regression indicated that executive green cognition has enhanced corporate ESG performance, thereby driving their GTI. Finally, the Poisson regression results with cross terms suggested that both government environmental regulation and executive overseas experience have positively moderated the promotion effect of executive green cognition on GTI. These findings provide an in-depth interpretation on the mediation effect of GTI, a new action mechanism path for the relationship between executive cognition and corporate innovation and a micro-level theoretical basis for policy recommendations proposed to promote enterprises' GTI and ESG practices. Our findings will provide new insights for Chinese policy formulation, while they are also applicable to other countries that improve corporate GTI and ESG performance not only originate externally from policy pressure but also are internally self-driven because they suggest the importance of executives’ cognition for long-term sustainability development strategy.

The marginal contributions of this study are as follows. First, different from the existing research on the mediating effect of GTI in the relationship between executives' green cognition and corporate performance, this study focuses on the direct-action mechanisms of executives' green cognition on corporate GTI. We consider that executives with high green cognition tend to focus their attention on green environmental concepts and will actively develop the corporate dynamic management capabilities, thereby actively coordinating internal and external resources to invest in green product research and development as well as GTI. Empirical test has shown that executive green cognition plays an active role in promoting corporate GTI. This finding provides an in-depth interpretation on extant studies of the mediation effect of GTI and enriches research on the internal influencing factors of driving enterprise GTI. Second, this study proposes that ESG performance plays a mediating role in the impact of executive green cognition on corporate GTI. This provides a new action mechanism path for existing research on the relationship between executive cognition and corporate innovation. Additionally, based on upper echelon's theory, this study proposes that executive green cognition enhances ESG performance, with the hypothesis being verified after empirical tests. This finding not only expands the application of the upper echelon's theory in the field of enterprise strategic management, but also provides a new perspective for research on the internal influencing factors improving corporate ESG performance. Third, this study further explores the impact of different scenarios on the relationship between executive green cognition and corporate GTI. Based on existing research, this study has selected government environmental regulations and executive overseas experiences as the moderating variables and finds that both of them positively moderate the promotion effect of executive green cognition on GTI. The finding expands the research on the situational mechanisms between executive green cognition and corporate GTI and provides targeted guidance on how to enhance executive green cognition and thereby promote corporate GTI.

2. Theoretical background and research hypotheses

2.1. Theoretical background

2.1.1. Upper echelons theory

The upper echelons theory was proposed by Hambrick and Mason [36]. Based on Herbert Simon's concept of bounded rationality [37], they assume that managers are boundedly rational when making decisions, that is, managers will face complex and ambiguous internal and external environments, while their knowledge and abilities are limited, thus making it impossible for them to be completely rational in decision-making. They will make decisions based on their own experiences, abilities, and cognition, that is, individual characteristics of managers (such as age, educational background) and psychological cognition influence strategic decision-making behavior. Hence, the upper echelons theory argues that the behavioral motivations behind corporate strategy should be interpreted from a cognitive perspective. Based on this theory, this study will explore how executive green cognition could affect corporate ESG performance.

2.1.2. Attention-based view

Attention has been a cognitive factor of interest to researchers in recent years, as it affects the strategic behavior of enterprises. The key to decision-making lies in how decision-makers allocate their limited attention effectively and rationally [37]. Subsequently, Ocasio formally proposed the attention-based view of enterprises [38], which includes three basic viewpoints: first, the focus of attention influences decision-makers’ behavior; second, specific situations affect the issues and answers that decision-makers focus on; third, the rules, resources, and social relationships of enterprises control managers' focus on issues and answers, as well as specific activities and communications. Based on these viewpoints, this study will explain how the shift of managers’ attention caused by the external environment changes the strategic direction of the enterprise, such as enterprise innovation strategy.

2.1.3. Stakeholder theory

Stakeholder theory holds that companies are responsible not only to shareholders but also to other stakeholders, including employees, customers, suppliers, communities, and governments [39]. This perspective breaks away from the traditional shareholder primacy theory and proposes a more comprehensive and balanced view, emphasizing the balance of interests from multiple parties and long-term sustainable development. According to this theory, ESG performance can help companies improve their relationships with stakeholders (investors, customers, suppliers and so on) [40,41]. The study considers that this not only helps enterprises build good environmental image, thereby attracting excellent people for GTI but also gains trust and support from stakeholders, thus providing financial support for GTI.

2.2. Research hypotheses

2.2.1. Executive green cognition and enterprise GTI

Executive green cognition is defined as the cognitive and knowledge structure formed by corporate executives based on their understanding of resource and environmental issues as well as their psychological experience in undertaking the responsibility of conserving resources and protecting the environment. It not only helps guide enterprises pay more attention to the green environmental protection field and strengthen research and application of green technologies, but also helps enterprises better understand and respond to environmental policies and market demands, as well as actively engaging in green innovation.

First, executives are top-down initiators of corporate innovation, and their cognitive characteristics trigger and initiate mechanisms in the innovation process [17]. Drawing on the attention-based view, existing research indicates that the attention of senior management is an intrinsic mechanism influencing corporate innovation behavior [42]. Attention serves as an important reflection of executive cognition. Influenced by the global advocacy for green and low-carbon development, executives with high levels of green cognition tend to focus their attention on green environmental concepts. They will actively incorporate green environmental concepts into corporate development strategies and inform employees, thereby obtaining employee support and commitment to corporate innovation activities [43]. They also will actively coordinate internal and external resources for the development and innovation of green products, processes, and technologies [44].

Second, managerial cognition influences the dynamic capabilities of enterprises [45] and will be conducive to stimulating corporate innovation [46]. Enterprise dynamic capabilities refer to the ability of enterprises to renew, integrate, and restructure internal and external resources to respond to environmental changes and gain long-term competitive advantages. It includes the ability to perceive opportunities, integrate and utilize capabilities, and transform and reconstruct capabilities [47]. The stronger the green cognition of executives, the more actively they will utilize their ability to perceive opportunities to gather information on market environmental changes, green environmental policy orientations, and consumer green demands [18]. They will be more willing to introduce new green knowledge into the enterprise and integrate it into the process of green innovation practices [48]. They will also be more inclined to utilize the ability to transform and reconstruct capabilities to reconfigure the resources of enterprises, such as adjusting the organizational structure and operating system of the enterprise to meet the needs of green innovation, reduce obstacles in the innovation process, and provide the most favorable internal support for green innovation.

Finally, environmental protection is an important task for governments at all levels in the context of sustainable development. Governments have established environmental regulations to constrain corporate pollution behavior. Executives with high green cognition have a better understanding and awareness of government environmental regulatory policies and can better estimate and predict the risks associated with environmental pollution behavior [49]. When they perceive that polluting production activities will result in serious economic consequences and huge losses to the enterprise, they actively develop green innovation strategies such as upgrading production technology and procuring clean energy to avoid potential environmental risks [12]. Hence, we propose the following hypothesis.

H1

Executive green cognition may positively promote enterprise GTI.

2.2.2. Executive green cognition, ESG performance, and enterprise GTI

ESG is not only a standard for measuring sustainable enterprise development, but also a profound transformation of its business philosophy and behavior. The upper echelons theory argues that the behavioral motivations behind corporate strategy should be interpreted from a cognitive perspective. Based on this theory, this study considers that executive green cognition can have an impact on corporate ESG performance from three aspects.

First, executives with a high green cognition have a deeper understanding of the competitive advantages that green development strategies bring to a company such as reducing the cost of fulfilling environmental responsibilities and enhancing competitiveness [2], achieving a ‘win-win’ for economic efficiency, environmental protection, and sustainable development. Therefore, they actively formulate sustainable environmental management strategies to reduce environmental pollution and ecological damage, achieving the goal of environmental sustainability, thereby obtaining a higher ESG rating. Second, executives with strong green cognition have a stronger sense of social responsibility and higher empathy. They are more likely to promote more altruistic charitable donation behaviors [50], be willing to advance environmental practices, communicate the value of eco-friendly products to consumers, and adopt more responsible social behaviors, such as improving labor conditions, enhancing community participation, and ensuring supply chain sustainability [51]. This helps enterprises to derive a high ESG rating. Finally, executives with a high cognition of external environmental and pressure are more likely to implement environmental risk assessments and reporting mechanisms while improving enterprise transparency and risk management capabilities, thereby making it easier for companies to receive positive evaluations in ESG assessments [52]. Based on the above analysis, we believe that executive green cognition could enhance ESG performance.

Signaling theory suggests that information is transmitted through sending and receiving signals between different parties. ESG performance of companies can serve as a signal to convey internal information of the company to the outside world [40]. Good ESG performance can send a positive signal that enterprises actively aim at proactive environmental management and sustainable strategies. These signals can be received and interpreted by external stakeholders, thereby shaping and changing their impressions and attitudes towards the company [41]. According to the stakeholder theory, companies with good ESG performance will attract the attention of stakeholders and are more likely to receive tax incentives, environmental subsidies, green bonds, and other sustainable financing tools [25], which expand financing channels and reduce financing costs for enterprise GTI [53]. Good ESG performance not only helps enterprises build good environmental image and win an environmentally friendly reputation which attracts excellent people and increases the trust of cooperative companies to facilitate knowledge sharing [27], mitigating constraints on GTI owing to talent shortages and knowledge deficiencies, but also gains trust and support from stakeholders, thus providing financial support for GTI and facilitating the construction of broader and deeper social networks with stakeholders to form a shareable knowledge base [54], thus providing knowledge resources for GTI. Hence, we propose the following hypothesis.

H2a

Executive green cognition could enhance ESG performance.

H2b

Executive green cognition could promote GTI by enhancing ESG performance.

3. Methodology

3.1. Data sources

This study used data from enterprises listed on the A-share market of the Shanghai and Shenzhen stock exchanges between 2012 and 2021 to conduct an empirical analysis. These data were collected from the China Stock Market and Accounting Research database and the Wind database. The sample enterprises were processed as follows. First, the enterprises subject to special treatment (ST) and particular transfer (PT) were removed because these companies or their financial data are abnormal. In addition, *ST enterprises that suffered losses for more than two consecutive years were excluded. Second, companies with abnormal data, missing data, or delisted data were eliminated. In total, 12,246 data samples were obtained. Finally, considering that the existence of abnormal data may have caused unnecessary interference in the empirical analysis, all variables were winsorized at the 1 % and 99 % levels.

3.2. Empirical model

To verify whether executive green cognition positively promotes enterprise GTI, the baseline regression model is expressed as follows:

$${GTI}_{i,t}={\alpha }_0+{\alpha }_1{EGC}_{i,t}+{\alpha }_2{X}_{i,t}+{\lambda }_i+{\eta }_t+{\epsilon }_{i,t}$$ (1)

where i and t refer to firm and year, respectively; GTI_i,t is the green technological innovation of enterprise i in year t; EGC_i,t refers to executive green cognition level of enterprise i in year t; X_i,t are the control variables; λ_i is the individual fixed effect, while η_t is the time fixed effect; and ε_i,t is a random disturbance term.

The third step of the traditional three-step method is to add the mediating variable, as a control variable, to Model (1). Its purposes are to observe the significance of the mediating variable on the dependent variable, and to calculate the degree of direct and indirect effects respectively. However, in observational data studies, the purpose of adding control variables is mainly to solve the endogenous problems caused by control variables [55]. Therefore, we reconstruct Model (3) instead of adding the mediating variable ESG to Model (1), since this study focuses on the significance of ESG impact on corporate GTI rather than the degree of its effect.

$${\mathrm{M}}_{\mathrm{i},\mathrm{t}}={\mathrm{\beta }}_0+{\mathrm{\beta }}_1{\text{EGC}}_{\mathrm{i},\mathrm{t}}+{\mathrm{\beta }}_2{\mathrm{X}}_{\mathrm{i},\mathrm{t}}+{\mathrm{\lambda }}_{\mathrm{i}}+{\mathrm{\eta }}_{\mathrm{t}}+{\mathrm{\epsilon }}_{\mathrm{i},\mathrm{t}}$$ (2)

$${\text{GTI}}_{\mathrm{i},\mathrm{t}}={\mathrm{\gamma }}_0+{\mathrm{\gamma }}_1{\mathrm{M}}_{\mathrm{i},\mathrm{t}}+{\mathrm{\gamma }}_2{\mathrm{X}}_{\mathrm{i},\mathrm{t}}+{\mathrm{\lambda }}_{\mathrm{i}}+{\mathrm{\eta }}_{\mathrm{t}}+{\mathrm{\epsilon }}_{\mathrm{i},\mathrm{t}}$$ (3)

where M represents the mediation variable. The testing steps here are as follows. First, a regression analysis is conducted on Model (2). If regression coefficient β₁ is significant, it indicates that the effect of executive green cognition on the mechanism variable exists. Second, Model (3) is used to test the mechanism variable impact on enterprise GTI, with the regression coefficient being γ₁. Finally, if both coefficients were significant, the mediating role of the mechanism variable was valid.

3.3. Variable definition

Dependent variable: enterprise GTI. This study searched for the number of green patents of enterprises according to the green patent codes in the International Patent Classification Green Inventory published by the World Intellectual Property Organization. Then, the number of green patent applications of the sample enterprise is used with the natural logarithm, which represents the GTI level of the enterprise. Meanwhile, we used the same method to calculate the values of green invention patents and green utility model patents for heterogeneity testing.

Independent variable: executive green cognition (EGC). The text analysis method is considered to have high reliability and validity in capturing executives' cognition [56]. Based on the Whorf-Sapir hypothesis, they posit that an individual's psychological cognitive characteristics are manifested through the language they use, and the words appearing in texts that individuals are involved in are effective reflections of their thoughts and ideas. The measurement of word frequency can accurately represent the managers focus of attention [57]. This method has been used in studies [[21], [22], [23]]. Based on extant studies, we selected 19 feature words, such as energy conservation and emission reduction, low-carbon and pollution control. Text analysis was then used to obtain the frequency of each feature word from the annual reports of listed companies from 2012 to 2021, with their sum representing the green cognition level of executives.

Additionally, to address the issue of data convergence on variables of executive green cognition and ESG, the index of executive environmental attention was used to replace the variable of executive green cognition for the robustness test of mediation effect. The attention-based view of the firm ascribes corporate decision-makers’ cognition a pivotal position in strategic decision-making [38]. He suggests that the outcome of corporate strategic decisions largely depends on the focus of the management team's attention. The corporate strategic decision-making factors on which the executive team focuses will ultimately influence the formulation of corporate strategic decisions. Therefore, based on the study [58], we have selected keyword phrases related to the environment, then count the total frequency of keywords related to environmental attention from the management discussion and analysis section, and finally take the natural logarithm after adding one to measure executive green cognition.

Mediation variable: ESG performance. It is measured by ESG ratings at the end of year t for enterprise i. The ESG rating is published by Sino-Securities Index Information Service (Shanghai) Co. Ltd. and comprises nine levels: C, CC, CCC, B, BB, BBB, A, AA, and AAA. The data were obtained from a wind database. In this study, the annual ESG ratings of enterprises are assigned values from 1 to 9 according to their levels.

Control variable. Based on existing research, this study selected company size (SIZE), asset-liability ratio (ALR), net profit margin (NPM), fixed assets ratio (FAR), Tobin's q value (TQ), and managerial ownership (MS) as the control variables (Table 1).

Table 1.

Variable definition.

Type	Variable	Variable definition
Dependent variable	Enterprises green technology innovation (GTI)	The numbers of green patent applications of the sample enterprise add 1 first and then take the natural logarithm
Independent variable	Executives' green cognition level (EGC)	The frequency of 19 keywords related to executives' green cognition is summarized respectively.
Mediating variable	ESG	ESG ratings at the end of year t for enterprise i
Control variables	company size (SIZE)	The total assets of the enterprise at the end of the year take the natural logarithm
	Asset-liability ratio (ALR)	Ratio of total liabilities to total assets
	Net profit margin (NPM)	Ratio of net profit to operating income
	Fixed assets ratio (FAR)	Ratio of fixed assets to total assets
	Tobin's q value (TQ)	Ratio of enterprise market value to total assets
	managerial ownership (MS)	Ratio of the number of shares held by management to total equity

4. Results

4.1. Descriptive statistical analysis

Descriptive statistics for the variables are shown in Table 2. The mean value of the GTI level of the sample companies was 0.229, median 0, minimum 0, maximum 2.833, and standard deviation 0.534, indicating an increasing difference in the GTI level of the sample companies. More than half the sample companies did not apply for green innovation patents during the observation period. The average executive green cognition value was 2.086, minimum 0, and maximum 19, indicating that the executive green cognition of the sample companies is quite different. In terms of company characteristics, the average SIZE value was 22.31, minimum 19.89, and maximum 26.39, indicating that the sample enterprise size was relatively balanced. However, the other control variables reflecting company characteristics showed significant differences.

Table 2.

Descriptive statistics results of variables.

Variable	Mean	Min	Max	Median	Std. dev.
GTI	0.229	0	2.833	0	0.534
EGC	2.086	0	19	1	3.304
ESG	4.062	1	9	4	1.105
SIZE	22.31	19.89	26.39	22.141	1.166
ALR	0.418	0.0438	0.896	0.409	0.194
NPM	0.0571	−1.700	0.537	0.072	0.204
FAR	0.182	0.00170	0.688	0.158	0.136
TQ	2.016	0.828	9.030	1.649	1.157
MS	14.86	0	70.17	3.912	18.85

4.2. Baseline regression results

The dependent variable, numbers of green technology patents, is count data. Hence, Poisson regression or negative binomial regression should be chosen for estimation. Furthermore, if the patent data contains a large number of zero values, zero-inflated Poisson or zero-inflated negative binomial regression should be selected [59]. Therefore, we first calculated the expected value and variance of the dependent variable and found that they are almost equal (mean = 0.1541 and variance = 0.1545), indicating that Poisson regression is suitable for the study. Then, we conducted a Vuong test and found z-value is 1.12 (Pr > z = 0.131), suggesting that zero-inflated Poisson regression is not appropriate. Consequently, this study will employ panel Poisson regression model to estimate. The regression results are listed in Table 3. The estimated results of random effects are shown in column (1) of Table 3 which indicate that the regression coefficient was 0.0919 and is significantly positive at the 1 % level. Then, controlling for industry, individual and time-fixed effects, the estimated results of fixed effects are shown in column (2) of Table 3. The regression coefficient is 0.0528, which is also significantly positive at the 1 % level. Additionally, Hausman test shows that the estimation of fixed effects is relatively better.

Table 3.

Benchmark regression results.

	GTI	Multicollinearity test
	RE	FE	VIF	Tolerance
EGC	0.0919*** (9.56)	0.0528*** (4.39)	1.080	0.925
SIZE	0.1665***	0.2454**
	(4.78)	(2.31)	1.670	0.600
ALR	−0.0785	−0.1964
	(-0.44)	(-0.49)	1.550	0.647
NPM	0.3427***	0.4473**
	(2.95)	(1.89)	1.090	0.918
FAR	−3.7870***	−2.5001***
	(-15.55)	(-3.65)	1.090	0.921
TQ	0.0801***	0.0205
	(3.48)	(0.56)	1.210	0.830
MS	0.0059***	−0.0031
	(7.04)	(0.73)	1.200	0.831
Cons	−5.3230*** (−7.04)	–	–	–
Individual fixed effect	No	Yes	(Mean) 1.27
Time fixed effect	No	Yes
Industry fixed effect	No	Yes
Number of samples	12246	4708	–	–
Hausman	38.79 (0.00)		–	–
Wald-P	0.00	0.00	–	–

Note:(1)When using Stata software to estimate panel Poisson's counting models, there is no constant term estimation value for fixed effects. (2) The difference in samples number is automatically adjusted by Stata software. (3) Robust standard error is used. (4) The values in parentheses are z-statistics. (5) * * *, * *, and * represent significance at the levels of 1 %, 5 %, and 10 %, respectively.

The above test indicates that executive green cognition has a significantly positive impact on enterprise GTI after controlling for industry, individuals, time, and other factors that influence enterprise GTI. In other words, the higher the level of executive green cognition, the better the performance of enterprise GTI, thus verifying Hypothesis 1. The possible reasons for the positive impact of executives’ green cognition on corporate GTI are that executives are top-down initiators of corporate innovation, and their cognitive characteristics trigger and initiate mechanisms in the innovation process [17]. First, drawing on the attention-based view, attention serves as an important reflection of executive cognition and executives with high levels of green cognition tend to focus their attention on green environmental concepts, thereby actively coordinating internal and external resources to invest in green product research and development as well as GTI [32,44]. Second, managerial cognition influences the dynamic capabilities of enterprises [45] and will be conducive to stimulating corporate innovation [46], that is, executives with high green cognitive abilities could actively utilize the corporate dynamic capabilities of sensing, seizing and reconfiguring to stimulating corporate GTI. Third, executives with high green cognition have a better understanding of government environmental regulatory policies and could better predict the potential environmental risks [49], thereby actively developing green innovation strategies such as upgrading production technology and procuring clean energy to avoid potential environmental risks [12].

The regression results of the other control variables show that the larger the company, the stronger the profitability, and the lower fixed asset investment respectively, the higher the level of green innovation, similar to the results of the existing research. Additionally, the variance inflation factor test for each variable indicates that the variance inflation factor values of all variables are far less than 10 and the tolerance of each variable is greater than 0.2, which suggests that there is no multicollinearity problem in the regression.

4.3. Robustness test results

4.3.1. Change the regression model

This study also used other econometric models for testing. Because some companies have not disclosed or lack GTI, the GTI indicator in this study has zero value. Based on the study [60], enterprise GTI is defined as a binary variable. If a company's green technology patent applications exceed zero, the GTI is set to 1; otherwise it is set to 0. First, a logit model was used for testing, and second, a Tobit model was used to control for the left-censoring bias in the GTI sample. The estimated results of columns (1) and (2) in Table 4 show that, regardless of which econometric model is chosen, the regression coefficient of executive green cognition on enterprise GTI is significantly positive at the 1 % level. This result is consistent with the findings of this study.

Table 4.

Results of the robustness test.

	(1) Logit	(2) Tobit	(3)	(4)	(5)
	GTI	GTI	R_GTI	GTI	GTI
EGC	0.1298***	0.1288***	0.1590***	–	0.0525***
	(19.83)	(19.81)	(12.37)		(4.36)
EA	–	–	–	0.2364***	–
				(2.82)
SIZE	0.2216***	0.2624***	−0.0580	0.2374**	0.2438**
	(8.86)	(10.64)	(-0.88)	(2.23)	(2.30)
ALR	−0.1047	−0.1548	0.1083	−0.2116	−0.1971
	(-0.70)	(-1.03)	(0.29)	(-0.53)	(-0.49)
NPM	0.4376***	0.4821***	0.5103	0.4450*	0.4509*
	(3.19)	(3.55)	(1.44)	(1.88)	(1.91)
FAR	−3.6364***	−3.8882***	−4.0816***	−2.5472***	−2.5015***
	(-17.38)	(-18.76)	(-7.57)	(-3.69)	(-3.65)
TQ	0.1404***	0.1526***	0.0230	0.0266	0.0216
	(6.83)	(7.48)	(0.42)	(0.72)	(0.59)
MS	0.0095***	0.0091***	−0.0026	−0.0020	−0.0031
	(7.34)	(7.13)	(-0.82)	(-0.45)	(-0.73)
GRANT	–	–	–	–	0.0609
					(0.73)
Cons	−6.5296***	−7.4634***	−2.2790	–	–
	(-11.78)	(-13.58)	(-1.56)
Individual fixed effect	No	No	No	Yes	Yes
Time fixed effect	No	No	No	Yes	Yes
Industry fixed effect	No	No	No	Yes	Yes
Number of samples	12246	12246	12246	4644	4708
Wald-P	–	–	0.00	0.00	0.00
LR chi2	761.26***	839.77***	–	–	–
Pseudo R2	0.0587	0.0438	–	–	–

Note: The values in parentheses are z-statistics; * * *, * *, and * represent significance at the levels of 1 %, 5 %, and 10 %, respectively.

4.3.2. Alternative measurement of dependent variable

This study employed the indicator R_GTI, which represents the proportion of green patent applications to total patent applications, to measure enterprise GTI. We will use a zero inflation Poisson regression model because there are many zero values in the dependent variable. The regression results of Vuong test showed that z-value is 22.12, indicating that zero inflation Poisson regression model is appropriate. The estimated results of executive green cognition on corporate GTI are shown in column (3) of Table 4. It demonstrates that the regression coefficients for executive green cognition are significantly positive at the 1 % level. This indicates that even after replacing the dependent variable, the promotion effect of executive green cognition on enterprise GTI remains valid. Therefore, the conclusions of this study are robust.

4.3.3. Replace the independent variable

The executive environmental attention index is used to address the issue of data convergence during mechanism testing. Here, we employ it to replace the independent variable for robust test. The results in column (4) of Table 4 show that executive environmental attention remains significantly positive at the 1 % level for enterprise GTI, supporting the conclusion of this study.

4.3.4. Add external environmental policy variables

To incentivize enterprise green transformation and sustainable development, the government has implemented a series of environmental regulatory policies. Government environmental subsidies involve providing subsidies to enterprises for investments in environmental governance and improving product processing techniques to stimulate green innovation. Therefore, government environmental subsidy policies may affect enterprise GTI behavior. This study added the variable of government environmental subsidies (GRANT) in order to conduct a Poisson regression analysis. The results in column (5) of Table 4 show that executive green cognition remains significantly positive at the 1 % level for enterprise GTI, supporting the conclusion of this study.

4.4. Endogeneity test results

4.4.1. Instrumental variable method

To address the potential issues of reverse causality between executive green cognition and enterprise GTI and omitted variables, this study employed the year-industry mean of executive green cognition (A_EGC) and its lagged one-period (L.A_EGC) as instrumental variables. First, the results of the Hausman test indicate that there are endogenous problems in the model. Second, the results of the first-stage regressions for the instrumental variables A_EGC and L.A_EGC are presented in columns (1) and (3) of Table 5. The regression coefficients for both instrumental variables are significantly positive at the 1 % level, indicating that the instrumental variables are correlated with the endogenous variables. F-statistic values from the Wald test were 246.14 and 409.98, which are greater than the critical value of 19.93 at the 10 % level, passing the weak instrument test. The Sargan test p-value was 0.2554, higher than the typical significance level, suggesting the absence of over-identification issues. Finally, the results of the second-stage regression in columns (2) and (4) of Table 5 indicate that the regression coefficients of executive green cognition are significantly positive at the 1 % level, demonstrating a significantly positive impact of executives on enterprise GTI.

Table 5.

Endogeneity test results.

	2SLS				PSM
	(1)	(2)	(3)	(4)	(5)
	EGC	GTI	EGC	GTI	GTI
A_EGC	0.6974***	–	–	–	–
	(37.23)
L.A_EGC	–	–	0.6450***	–	–
			(30.29)
EGC		0.0480***	–	0.0430***	0.0275***
		(11.61)		(8.55)	(2.60)
SIZE	0.0668***	0.0162***	0.0795***	0.0167***	0.0737***
	(2.60)	(4.09)	(2.71)	(3.72)	(4.55)
ALR	−0.0371	0.0128	−0.1697	0.0253	−0.0691*
	(-0.25)	(0.57)	(-1.05)	(1.03)	(-1.66)
NPM	0.0611	0.0522***	0.0926	0.0437**	0.0547***
	(0.52)	(2.87)	(0.76)	(2.34)	(3.51)
FAR	2.2454***	−0.5827***	2.6066***	−0.5064***	−0.1818**
	(12.11)	(-17.32)	(12.62)	(-12.96)	(-2.47)
TQ	−0.2234***	0.0280***	−0.2226***	0.0278***	0.0117**
	(-10.23)	(7.91)	(-8.97)	(6.93)	(2.08)
MS	−0.0014	0.0011***	−0.0034**	0.0011***	−0.0003
	(-1.08)	(5.64)	(-2.24)	(4.82)	(-0.56)
Cons	−1.0528*	−0.2672***	−1.2418*	−0.3092***	−1.3917***
	(-1.85)	(-3.05)	(-1.90)	(-3.10)	(-3.82)

Hausman-P	0.00						0.00		–
Wald-F	246.14						409.98		–
Sargan-P					0.2554
Number of samples	12246		12246		8752		8752		12246
Adjusted R-squared	0.1837		0.0293		0.1900		0.096		0.553

Note: The values in parentheses are t-statistics; * * *, * *, and * represent significance at the levels of 1 %, 5 %, and 10 %, respectively.

4.4.2. Propensity score matching (PSM)

We employed propensity score matching (PSM) to address sample selection bias. First, the study divided the sample into experimental and control groups based on median executive green cognition. Companies with EGC>0 were categorized as the experimental group, whereas the other sample companies were placed in the control group. Second, the variables SIZE, ALR, NPM, and MS were chosen as covariates, and nearest neighbor matching was conducted at a 1:1 matching ratio. Finally, selected control and experimental groups were tested for covariate balance. Table 6 presents the results of the study. The absolute values of standardized bias rates (% bias) for all matching variables were <6, and t-tests for the matched variables showed no rejection of the null hypothesis and that there were no systematic differences between the treatment and control groups, indicating that the selection of matching variables was appropriate, and the balance assumption was valid. Moreover, we conducted regression analysis using paired samples. The results in column (5) of Table 5 reveal that the regression coefficient of executive green cognition is significantly positive at the 1 % level. This indicates that even after addressing endogeneity issues using PSM, the hypotheses of this study are still valid.

Table 6.

Results of the balance test.

Variable	Unmatched	Mean		%bias	t-value	p-value
	Matched	Treated	Control
SIZE	U	22.336	22.285	4.4	2.52	0.012
	M	22.336	22.27	5.7	3.42	0.001
ALR	U	0.422	0.413	4.7	2.74	0.006
	M	0.422	0.420	0.8	0.52	0.604
NPM	U	0.0616	0.0521	4.7	2.70	0.007
	M	0.0616	0.060	0.7	0.49	0.625
MS	U	14.69	15.043	−1.9	−1.08	0.280
	M	14.69	14.978	−1.5	−0.90	0.369

4.5. Heterogeneity test results

State-owned and private enterprises exhibit significant differences in management structure, decision-making processes, resource allocation, and responses to government policies. These differences may lead to variations in executive green cognition, thereby affecting enterprise GTI. Therefore, this study divided the sample companies into state-owned and non-state-owned enterprises based on enterprise ownership to examine the differences in how executive green cognition influences GTI. The results in columns (1) and (2) of Table 7 indicate that the regression coefficients of executive green cognition for both state-owned and private enterprises are significantly positive at the 1 % level. The regression coefficient of the executive green cognition of state-owned enterprises was only 4.46 percentage points higher than that of private enterprises. Fisher's test showed that the p value of the coefficient difference between the groups was 0.268, higher than the typical significance level of 0.05. This suggests that the positive impact of executive green cognition on enterprise GTI does not differ significantly based on enterprise ownership.

Table 7.

Results of the heterogeneity test.

	Enterprises' ownership		Types of technological innovation
	(1)	(2)	(3)	(4)
	GTI (State-owned enterprise)	GTI (Private enterprise)	GUP	GIP
EGC	0.0871***	0.0425***	0.0589***	0.0427***
	(3.47)	(3.01)	(3.63)	(2.65)
SIZE	0.3935	0.2123	0.2014	0.2832**
	(1.63)	(1.60)	(1.39)	(1.97)
ALR	−0.9155	−0.2510	−0.3859	0.1014
	(-0.90)	(-0.54)	(-0.67)	(0.20)
NPM	0.7691	0.3061	0.5424*	0.4574
	(0.92)	(1.18)	(1.69)	(1.42)
FAR	−3.5357**	−2.7364***	−2.8579***	−2.6002***
	(-2.34)	(-3.35)	(-2.98)	(-2.85)
TQ	0.0394	0.0330	0.0150	0.0525
	(-0.45)	(0.78)	(-0.27)	(1.19)
MS	0.0191	−0.0036	0.0006	−0.072
	(0.41)	(-0.75)	(0.01)	(-1.28)
P-value of difference test between groups	0.268		–
Individual fixed effect	Yes	Yes	Yes	Yes
Tim fixed effect	Yes	Yes	Yes	Yes
Industry fixed effect	Yes	Yes	Yes	Yes
Number of samples	1005	3606	3135	3606
Wald-P	0.00	0.00	0.00	0.00

Note: (1) P-value of difference test between groups is calculated by Fisher test (1000 sampling times). (2) The values in parentheses are z-statistics. (3) * * *, * *, and * represent significance at the levels of 1 %, 5 %, and 10 %, respectively.

Enterprise green innovation can be categorized into substantive and strategic green innovation [61], according to the motivations behind a company's engagement in green innovation. Hence, this study used the number of green patents and utility green patents to measure strategic and substantive GTI levels, respectively. The results in columns (3) and (4) of Table 7 indicate that the regression coefficients of executive green cognition are significantly positive at the 1 % level, suggesting that executive green cognition has a significantly positive impact on both strategic and substantive enterprise GTI.

4.6. Results of mechanism test

The mediation variable ESG is an ordered discrete data with a normal distribution, so the ordered probit regression is used for Model (2). The results in columns (1) of Table 8 indicate that the regression coefficients of executive green cognition on ESG performance are significantly positive, suggesting that both of them contribute to improvements in ESG performance. Hypothesis 2a is confirmed. Then, GTI is count data, a Poisson regression is used for Model (3). The estimated results of random and fixed effects are shown in columns (2) and (3) of Table 8. The results show that ESG performance have a significantly positive impact on enterprise GTI at the 1 % level, indicating that an improvement in enterprise ESG performance can promote enterprise GTI. This is consistent with existing research conclusions [[62], [63], [64]]. ESG ratings can alleviate financing constraints and talent shortages in enterprises, thereby promoting GTI. The above results suggest that executive green cognition improves enterprise ESG performance, which in turn promotes GTI, thus confirming Hypothesis 2b. The possible reasons for executives' green cognition improving ESG performance are that they have a more comprehensive understanding of enterprise competitive advantages brought about by green strategies and could actively develop sustainable environmental management strategies. Executives with a high green cognition have a stronger sense of social responsibility and empathy to drive companies to implement more altruistic activities and have a strong understanding of the external environmental pressure required to improve enterprises’ transparency and risk management capabilities. Then, better ESG performance can enhance enterprise reputation and value, which not only attracts the top talent required for technological innovation but also gains investor trust, which brings financial support for GTI.

Table 8.

Mechanism test results.

	(1)	(2)	(3)
	ESG	GTI	GTI
EGC	0.0289***	–	–
	(7.98)
ESG	–	0.1478***	0.0416***
		(4.37)	(1.09)
SIZE	0.2822***	0.1380***	0.2311**
	(26.01)	(3.78)	(2.17)
ALR	−0.9862***	0.1377	−0.1184
	(-16.17)	(0.74)	(-0.29)
NPM	0.7468***	0.3165***	0.4411**
	(15.11)	(2.75)	(1.88)
FAR	−0.2383***	−3.1232***	−2.38***
	(-3.27)	(-12.15)	(-3.48)
TQ	−0.0158*	0.0489**	0.0159
	(-1.74)	(2.22)	(0.44)
MS	0.0049***	0.0052***	−0.0032
	(8.98)	(2.86)	(-0.73)
Industry fixed effect	No	No	Yes
Individual fixed effect	No	No	Yes
Time fixed effect	No	No	Yes
Number of samples	12246	12246	4708
Wald-P	–	0.00	0.00
Pseudo R2	0.0387	–	–

Note: (1) The values in parentheses are z-statistics. (2) The difference in samples number is automatically adjusted by Stata software. (3) * * *, * *, and * represent significance at the levels of 1 %, 5 %, and 10 %, respectively.

5. Further analyses

The hypothesis that executives' green cognition have a significant effect on promoting enterprise GTI was verified after baseline regression, endogenous and robustness tests. However, executives’ cognitive ability may be affected by their own characteristics and external factors. Hence, the differences in the impact of executive green cognition on GTI in different scenarios need further analysis.

5.1. Impact of government environmental regulation on the relationship between executive green cognition and GTI

Extant studies have pointed out that industry regulations and other factors have an impact on executive cognition [33]. Faced with a constantly changing external environment, cognition helps executives identify external environments, prompting them to change or adjust production and operation areas or corporate directions to respond to changes in the external environment [65]. To promote the green development of enterprises, governments may implement environmental regulatory measures to restrict corporate pollution behavior or incentivize green innovation [34,35]. How does government environmental regulation play a role in the relationship between executives’ green cognition and corporate GTI? To address this question, based on the study [66], we selected the frequency of vocabulary related to government environmental regulations from the provincial government work reports during the period from 2012 to 2021 as the proxy variable of government environmental regulation. Then, the government environmental regulation variable and its interaction term with executive green cognition are added to Model (1) for panel Poisson regression.

The estimation results of random effects and fixed effects are shown in columns (1) and (2) of Table 9. The interaction term between executive green cognition and government environmental regulation has significant promotion effects on corporate GTI, which indicates that government environmental regulation can positively moderate the promotion effect of executive green cognition on GTI. This is because that high-intensity environmental regulation could enhance the cognitive structure of executives on the importance of green environmental protection. Experienced managers, after identifying external environmental information, enrich their own cognition structure courtesy of it, which may guide corporate resources towards GTI.

Table 9.

Results of further analyses.

	(1)	(2)	(3)	(4)
	GTI	GTI	GTI	GTI
EGC	0.0899***	0.0513***	0.0913***	0.0524***
	(9.47)	(6.47)	(9.49)	(4.35)
SIZE	0.1685***	0.2430***	0.1547***	0.2373**
	(4.81)	(2.28)	(4.46)	(2.23)
ALR	−0.0865	−0.2294	−0.0466	−0.1953
	(-0.49)	(-0.57)	(-0.26)	(-0.49)
NPM	0.3332***	0.4495*	0.3634***	0.4530*
	(2.89)	(1.90)	(3.12)	(1.91)
FAR	−3.7901***	−2.5001***	−3.7589***	−2.5340***
	(-15.58)	(-3.65)	(-15.39)	(-3.70)
TQ	0.0798***	0.0238	0.0758***	0.0212
	(3.46)	(0.65)	(3.34)	(0.58)
MS	0.0059***	−0.0030	0.0057***	−0.0032
	(3.26)	(-0.69)	(3.12)	(-0.73)
ER	0.0636**	0.0304**
	(3.91)	(2.34)
EGC*ER	0.0495***	0.0242**
	(3.70)	(2.25)
OS	–	–	0.6904***	0.0854**
			(3.31)	(1.76)
EGC*OS	–	–	0.0535**	0.0472**
			(1.54)	(2.52)
Cons	−5.1807*** (−6.79)	–	−4.8907*** (−6.47)	–
Individual fixed effect	No	Yes	No	Yes
Time fixed effect	No	Yes	No	Yes
Industry fixed effect	No	Yes	No	Yes
Number of samples	12242	4708	12244	4708
Wald-P	0.00	0.00	0.00	0.00

Note: (1) The values in parentheses are z-statistics. (2) The difference in samples number is automatically adjusted by Stata software. (3) * * *, * *, and * represent significance at the levels of 1 %, 5 %, and 10 %, respectively.

5.2. Impact of executive overseas experience on the relationship between executive green cognition and GTI

Based on the imprinting theory, the impacts of environment on individuals during their growth process will internalize to form imprints with corresponding environmental characteristics, which will continue to affect individuals' behavioral decisions. Executives’ overseas study or work experience can be seen as a process of imprinting, shaping their cognition and abilities characteristics that match the overseas environment, thereby influencing corporate behavior. For example, executives with overseas experience with international perspective enables companies to better understand and adapt to the demands of international market, especially in environmental standards and green technologies and then accelerate the process of technological innovation [67,68]. Hence, does executive overseas experience influence the relationship between executive green cognition and corporate GTI? To address this question, this study selected executives who have studied or worked abroad for more than one year in countries or regions outside mainland China as the research subjects and calculated the ratio of executives with overseas education or work experience to the total number of executives in the company as the proxy variable of executive overseas experience. Then, the variable of executive overseas experience along with its interaction term with executive green cognition is added in Model (1) which is used for panel Poisson regression.

The estimation results of random effects and fixed effects are presented in columns (3) and (4) of Table 9. The interaction term between executive overseas experience and their green cognition has significant promotion effects on corporate GTI, which indicates that executive overseas experience could positively moderate the promotion effect of their green cognition on corporate GTI. The reason is that executives with rich overseas experience have often received advanced environmental education and training abroad and have a deep understanding of the values of sustainable development [67], which is conducive to shaping the executive green cognitive structure. This allows them to more effectively integrate multiculturalism and knowledge systems when promoting organizational transformation towards a green stance, thereby promoting the collision and integration of innovative thinking [67,68]. Therefore, this study believes that the experience of working or studying abroad enables executives to form a more acute awareness of innovation and investment in terms of cognition, thereby influencing corporate innovation decisions.

6. Discussions

One finding of this study is that executive green cognition has a significantly positive impact on enterprise GTI. The theoretical implication of this work is to provide a more in-depth interpretation of existing research on the mediating effect of GTI on the relationship between executive green cognition and corporate performance [22,23] and reveal the action mechanisms between executives’ green cognition and enterprises GTI. Executives are top-down initiators of corporate innovation, and their cognitive characteristics trigger and initiate mechanisms in the innovation process [17]. Based on attention-based view, Attention serves as an important reflection of executive cognition and executives with high levels of green cognition tend to focus their attention on green environmental concepts, thereby actively coordinating internal and external resources to invest in green product research and development as well as GTI [32]. Second, managerial cognition influences the dynamic capabilities of enterprises [33] and will be conducive to stimulating corporate innovation [34]. Executives with high green cognitive abilities could actively utilize the corporate dynamic capabilities of sensing, seizing and reconfiguring to stimulating corporate GTI. Third, executives with high green cognition have a better understanding of government environmental regulatory policies and could better predict the potential environmental risks, thereby actively developing green innovation strategies to avoid them [12]. The practical implication of this finding is to offer theoretical support for guiding companies to improve GTI independently.

The second finding of this study is that ESG played a mediating role in the impact of executive green cognition on enterprise GTI. The theoretical implication of this work is to enrich existing research on the action mechanism of executive cognition and corporate innovation [20] and provide a new perspective for research on how to improve ESG performance [[25], [26], [27], [28]].Executives with higher green cognition have a more comprehensive understanding of enterprise competitive advantages brought about by green strategies and could actively develop sustainable environmental management strategies. They have a stronger sense of social responsibility and empathy to drive companies to implement more altruistic activities [38,39], and have a strong understanding of the external environmental pressure to improve the transparency and risk management capabilities of enterprises. Hence, executives’ green cognition improves ESG performance. Based on the signaling theory and stakeholder theory, ESG performance can attract talent, gain investor trust and financial support [26,27], and earn stakeholder trust and support to form a shared knowledge resource library through social networks [41], all of which are conducive to alleviating the resource constraints of enterprise GTI. The practical implication of this finding is to offer theoretical support for guiding companies to focus more on ESG strategy formulation and a decision-making basis for the development of related ESG policies by governments.

The further research has also shown that government environmental regulation and executive overseas experience both positively moderate the promotion effect of executive green cognition on GTI. The theoretical implication of this work is to expand the research on the situational mechanisms between executive green cognition and corporate GTI. Government environmental regulation can improve the cognitive structure of executives on the importance of green environmental protection, which similar to the study of Cho and Hambrick [33]. Experienced managers, after identifying external environmental information, enrich their own knowledge structure with it, which may guide corporate resources towards GTI. Executives with rich overseas experience have often received advanced environmental education and training abroad and have a deep understanding of the values of sustainable development [67], which is conducive to shaping the executive green cognitive structure. This allows them to more effectively integrate multiculturalism and knowledge systems when promoting organizational transformation towards a green stance, thereby promoting the collision and integration of innovative thinking [67,68]. The practical implication of this finding is to provide targeted guidance on how to enhance executive green cognition and thereby promote corporate GTI.

7. Conclusions

During green and low-carbon development in enterprises, the motivation for GTI is often insufficient. This study used data from Chinese A-share listed companies in Shanghai and Shenzhen from 2012 to 2021 to examine empirically how executive green cognition influences corporate GTI. The results of a Poission regression shown that executives' green cognition have a significant effect on promoting corporate GTI, with the conclusion remaining valid after endogenous and robustness tests. Second, the estimated results of a stepwise regression indicated that executive green cognition has enhanced corporate ESG performance, thereby driving their GTI. Finally, the Poisson regression results with added cross terms suggested that both government environmental regulation and executive overseas experience positively have moderated the promotion effect of executive green cognition on GTI. These findings provide a micro-level theoretical basis for policy recommendations proposed to promote enterprises’ GTI and ESG practices.

The policy recommendations of our conclusions are as follows. First, the importance of executive green cognition should be emphasized. The government continues to improve environmental regulatory policies to better stimulate and constrain enterprises. Enterprises deeply understand the latest governmental environmental regulations and policies, select executives with overseas study or work experience, or send managers to study abroad for further education. This will enhance their cognitive abilities to play a positive role in motivating enterprise for GTI and ESG practices. Second, the practice and enhancement of the ESG concept should be emphasized. For long-term development, companies should integrate the ESG concept into their business management and should be strengthened to provide investors with more authentic, comprehensive, and accurate ESG information, which will help them gain recognition from consumers, and regulatory and rating agencies, and secure more resource support for GTI. The Chinese government should base their strategies on national development objectives, continually absorb international ESG experiences, and shape their ESG practices according to distinct Chinese characteristics.

8. Limitations and future research

This study has certain limitations. First, it focused on the effect of executive green cognition on GTI by improving ESG. However, the impact of executive green cognition is multifaceted, and improvements in GTI are affected by various factors. Therefore, other impact paths may exist that require further research. Second, the sample data were obtained from China. Future studies should use global samples to broaden the applicability of these results. Third, in theory the data used to measure executive green perception should be obtained through field research, but this has resulted in insufficient sample sizes and limited sample enterprise ranges. Therefore, based on the extracted feature words representing executive green perception, this study used text analysis to extract the frequency of each feature word from the annual reports of listed companies and summarized them to measure executive green perception levels. Nevertheless, the selection of both sample time periods and documents affected the construction of the feature words. Therefore, accurate measurement of the variables of executive green cognition needs to be further explored, which will bring about a more in-depth and extensive empirical analysis of the impact of executive green perceptions.

Funding

There is no funding for this study.

Data availability statement

The sample data of this study are from the online database. The name and login link of the database are as follows: China Stock Market and Accounting Research database (https://data.csmar.com/) and Wind database (https://www.wind.com.cn/portal/en/EDB/index.html). Further inquiries can be directed to the corresponding author.

Additional information

No additional information is available for this paper.

CRediT authorship contribution statement

Lei Wu: Writing – original draft, Supervision, Methodology, Investigation, Formal analysis, Data curation, Conceptualization. Chun Wang: Writing – review & editing, Supervision, Methodology, Investigation, Formal analysis, Data curation. Honghao Ren: Writing – review & editing, Validation, Supervision, Conceptualization. Weijie Zhang: Writing – review & editing, Supervision, Investigation, Data curation.

Declaration of competing interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.