Green innovation and the cost of equity: evidence from China

Purpose This paper aims to examine the association between green innovation and cost of equity in China. study relies on investors’ base perspective shareholders’ perceived risk investigate relation Design/methodology/approach The uses firm-fixed effect regression for a sample Chinese public companies period 2008–2018. Findings authors find negative relationship capital. is found be more pronounced less financially constrained firms, during periods high economic policy uncertainty, firms with strong internal control environment. Finally, shows that became after passage Environmental Protection Law China 2012. results remain robust possible endogeneity concerns. Originality/value contributes literature by documenting shareholders favorably view implementing policies. also has implications regulators improving credit policy.