Can retail investors induce corporate green innovation? -Evidence from Baidu Search Index.

China's rapid economic development has caused some environmental damage in recent years. The popularity of the Internet has enriched the ways for investors to obtain information, which would exert an impact on corporate environmental behavior. Focusing on micro-enterprise green innovation from the perspective of informal regulation, this paper investigates the impact of investor attention on corporate green innovation. This study takes Chinese A-share listed companies from 2011 to 2018 as samples, constructs panel fixed-effects models and adopts multiple linear, Logistic and Tobit regressions. This article finds that investor attention, measured by the web search index, can significantly improve corporate green innovation. The conclusion is still valid after a series of robust tests. Besides, mechanism tests reveal that investor attention can promote corporate green innovation by improving the implementation efficiency of punitive environmental regulation, the use efficiency of environmental subsidies, and by increasing the reputation cost of enterprises. In additional tests, this paper further clarifies that investors' attention to negative public opinion can play a better role in environmental governance, and reveals the reason why investors are motivated to improve corporate green innovation. This research puts forward a unique perspective, which extends the understanding of informal environmental regulation and enriches research on green innovation at the micro-enterprise level, promoting the cross research of finance and environmental protection.