Environment‐specific political risk mitigation: Political lobbying versus green innovation

Greater political pressure to improve corporate environmental performance and mitigate climate change impact leads firms operate under greater risk uncertainty, affecting productivity firm value. Using a panel of 3255 US from 2002 2020, this research tests the effectiveness two environment-specific (EPR) mitigation approaches: lobbying green innovation. The results suggest that while both approaches EPR current year, only innovation reduces future EPR. By mitigating EPR, increases value degree than lobbying. This study also shows has larger effect on for leaders laggards in are robust alternative specifications innovation, potential endogeneity concerns. Overall, supports value-enhancing role as an effective strategy.