The Downside of Green Innovation: How Green Patents Affect Corporate Value and Profitability in Japanese Manufacturing Firms-Journal of Sustainability Research-CSCIED科技核心评价数据库-手机版

The Downside of Green Innovation: How Green Patents Affect Corporate Value and Profitability in Japanese Manufacturing Firms

The Downside of Green Innovation: How Green Patents Affect Corporate Value and Profitability in Japanese Manufacturing Firms

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DOI	10.20900/jsr20250078
刊名	Journal of Sustainability Research JSR
年，卷(期)	2025, 7(4)
作者	Shingo Ide,Hitoshi Takehara*,
作者单位	Financial Research Department, NLI Research Institute, Tokyo 102-0073, Japan2-0073, Japan ; Graduate School of Business and Finance, Waseda University, Tokyo 169-8050, Japan ;
摘要	This study examines the relationship between climate-oriented innovation and equity market valuation in Japanese manufacturing firms. In response to increasing regulatory and societal pressure to address climate change, manufacturing firms are expected to invest in technologies that advance environmental sustainability. To evaluate firm-level green innovation, we construct a Green Transformation Score (GXS) using a proprietary scoring method. Using panel data on publicly listed manufacturing firms in Japan, we find that a higher GXS is associated with a statistically significant decline in both stock market valuation and accounting profitability. In contrast, a higher Non-Green Transformation Score (NGXS) is positively associated with stock prices and profitability. These findings suggest that investors may place greater emphasis on the broader technological transformation captured by NGXS than on its environmentally focused counterpart. However, further analysis reveals that in several manufacturing industries, GXS has a positive and significant effect on equity value, attributable to its risk-mitigation mechanisms.
Abstract	This study examines the relationship between climate-oriented innovation and equity market valuation in Japanese manufacturing firms. In response to increasing regulatory and societal pressure to address climate change, manufacturing firms are expected to invest in technologies that advance environmental sustainability. To evaluate firm-level green innovation, we construct a Green Transformation Score (GXS) using a proprietary scoring method. Using panel data on publicly listed manufacturing firms in Japan, we find that a higher GXS is associated with a statistically significant decline in both stock market valuation and accounting profitability. In contrast, a higher Non-Green Transformation Score (NGXS) is positively associated with stock prices and profitability. These findings suggest that investors may place greater emphasis on the broader technological transformation captured by NGXS than on its environmentally focused counterpart. However, further analysis reveals that in several manufacturing industries, GXS has a positive and significant effect on equity value, attributable to its risk-mitigation mechanisms.
关键词	green transformation; green patents; equity valuation
KeyWord	green transformation; green patents; equity valuation
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Shingo Ide,Hitoshi Takehara*. The Downside of Green Innovation: How Green Patents Affect Corporate Value and Profitability in Japanese Manufacturing Firms [J]. Journal of Sustainability Research. 2025; 7; (4). - .

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