Introduction

Advancing green innovation is vital to promoting long-term sustainability in businesses as it helps firms meet ecological obligations and adhere to regulatory requirements while delivering enduring financial gains by enhancing energy efficiency, lowering material usage, and unlocking growth potential in environmentally conscious markets. However, in real-world applications, firms face various obstacles in pursuing green innovation. One major hurdle lies in the substantial upfront expenditures and continuous operational costs associated with developing and applying environmentally friendly technologies, which become even more pronounced without adequate funding or external motivational mechanisms. Consequently, firms are typically apprehensive about the uncertainty regarding returns on investment (Yu et al. 2021; Xiang et al. 2022). Green innovation relies heavily on specialised technologies and interdisciplinary knowledge. However, many enterprises face notable deficiencies in their environmental technology reserves, R&D experience, and talent pools, hindering their motivation for green transformation and limiting the effectiveness of implementation (Arfi et al. 2018; Martínez‐Ros and Kunapatarawong, 2019). As a result, while the importance of green innovation is increasingly recognised, its practical promotion at the enterprise level still confronts the dilemma of a “willingness to act, but an inability to do so”. Consequently, companies must actively seek more integrated approaches to green innovation to overcome the simultaneous limitations of resource scarcity and capability gaps.

Strategic alliances are widely recognised as an effective form of interorganisational cooperation that enables firms to overcome operational bottlenecks and enhance performance through resource complementarity and capability synergy (Mowery et al. 1996; Rothaermel and Deeds, 2004). An increasing number of recent studies have explored how different types of strategic partnerships, such as those involving R&D, customer collaboration, competitor cooperation, and financial institution engagement, affect the economic performance of individual firms (Sampson, 2007; Fang et al. 2012; Kepler, 2021; Frattaroli and Herpfer, 2023). Nonetheless, a significant void persists in existing research regarding alliances specifically established to address environmental concerns, commonly referred to as strategic environmental alliances. Although earlier studies investigating the drivers of green innovation have largely concentrated on broad institutional or macro-level influences, such as regulatory pressures from the external environment and corporate governance systems within firms (Eiadat et al. 2008; Makpotche et al. 2024; Yang et al. 2024), there has been comparatively limited exploration of the firm-level processes that support green innovation through cooperative relationships between organisations. While numerous studies have explored how targeted strategic partnerships contribute to improving firm-level outcomes, a coherent theoretical foundation and robust empirical support are still missing when it comes to understanding how environmental strategic alliances impact companies’ green innovation efforts. In response to this research gap, the current study aims to enrich theoretical understanding by exploring if and how environmental strategic alliances promote green innovation at the firm level.

From a theoretical perspective, strategic environmental alliances foster green innovation by strengthening firms’ capacity to invest in environmental protection and facilitating environmental knowledge spillovers. Such alliances promote the sharing of capital, equipment, and policy-related information among member firms, thereby reducing both the investment costs and uncertainties associated with individual participation in environmental projects. This cost-sharing mechanism enhances firms’ ability to engage in green technology R&D and upgrade their environmentally friendly production facilities. Consequently, increased levels of environmental investment provide firms with the financial security necessary to support and advance green innovation initiatives (Khanra et al. 2022; Owen and Yawson, 2013). Furthermore, strategic environmental alliances encourage the sharing of eco-friendly technologies and sustainable management approaches by establishing collaborative networks among firms, which, in turn, accelerate the transfer of environmental expertise beyond individual organisational limits, an effect often described as environmental knowledge spillover (Ettlie and Reza, 2023; Wang et al. 2023). Such spillovers enable firms to expand the applicability of green technologies and deepen their understanding and proficiency in innovative environmental practices. Consequently, companies have become capable of refining environmentally sustainable production methods, creating innovative green products, and significantly improving their overall green innovation performance.

To empirically test the theoretical propositions outlined in this study, data from China’s A-share listed firms spanning 2007–2022 were utilised to analyse how environmental protection-oriented strategic alliances relate to green innovation activities within corporations. The results revealed that forming strategic alliances that focus on environmental protection substantially boosted firms’ green innovation efforts. These conclusions remained consistent across multiple methodological checks, such as employing different measures for key variables, applying the instrumental variable approach, conducting entropy balancing, controlling for potential policy-related influences, utilising the difference-in-differences (DID) technique, and performing placebo tests to rule out spurious effects. An analysis of the underlying mechanisms demonstrated that strategic alliances centred on environmental protection drove green innovation in firms by boosting their investment in eco-friendly initiatives and encouraging the dissemination of environmental knowledge across organisations. In the heterogeneity analysis, this study first considered the potential influence of the alliance structure on the main findings. Specifically, it examined the different impacts of equity-and non-equity-based environmental strategic alliances on corporate green innovation. The analysis showed that strategic environmental alliances involving equity participation had a stronger positive impact on fostering green innovation within companies. Second, the willingness of alliance members to share environmental protection knowledge and technology significantly influenced the depth of the knowledge spillover. This study explored the influence of different levels of collaborative culture among partner firms on the link between environmental protection alliances and green innovation and found that a robust culture of cooperation within alliances supported the advancement of green innovation initiatives more effectively. Finally, the extent to which local governments and corporations prioritise environmental issues can significantly affect firms’ ecological actions. This study explored how different degrees of environmental focus from both regional authorities and company leaders shaped the connection between strategic alliances for environmental protection and firms’ green innovation performance. The findings revealed that a heightened environmental focus of both local authorities and firms intensified the beneficial influence of environmental protection alliances on green innovation outcomes. Based on these findings, this study makes the following contributions,

First, it advances the boundaries of research on specialised forms of strategic cooperation. Although much of the current literature concentrates on how R&D collaborations, client-based partnerships, and alliances between firms and financial institutions affect economic outcomes at the firm level, the role of strategic environmental alliances has received relatively little scholarly attention. Focusing on the environmental protection domain, this study thoroughly examines the fundamental pathways that stimulate green innovation in firms, thereby advancing the development of strategic alliance research frameworks within specific functional contexts.

Second, this research enhances the existing scholarship by broadening the analytical lens through which the driving factors of green innovation are understood. Whereas prior research mainly emphasises the “reactive” influences of regulatory pressures and internal governance structures, the present study shifts focus to environmental strategic alliances as a more “proactive” catalyst in advancing green innovation.

Third, this research explores actionable routes for enterprises to achieve green transformation within the framework of the “dual-carbon” initiative. This study uncovers a variety of situational elements that shape how well strategic environmental partnerships perform, providing both conceptual backing and practical direction for firms aiming to strengthen their green innovation capacity through joint initiatives amid limited resources and increasing regulatory demands.

Literature review and research hypothesis

Literature review

Literature review of strategic alliances

Current research on strategic alliances primarily builds upon theoretical frameworks, such as the resource-based view, transaction cost economics, network perspectives, the theory of dynamic capabilities, and institutional frameworks. Viewed through the lens of resource-based theory, companies strengthen their ability to innovate and compete in the market by partnering with organisations that possess the resources they lack, enabling mutual access to essential assets such as specialised technologies, proprietary insights, and entry into new markets. (Das and Teng, 2000; Grant and Baden-Fuller, 2004). Simultaneously, transaction cost theory highlights the expenses that firms face during exchanges, especially under conditions marked by uncertain environments and asymmetric information. (Cuypers et al. 2021). Strategic alliances help firms mitigate search and negotiation costs in market transactions, a benefit that is especially pronounced in technology-intensive and innovation-driven industries (Ozmel et al. 2013; Chou et al. 2014; Lavie et al. 2022). Network theory posits that firms do not operate in isolation but are embedded within a complex network of multiple economic actors. These networks facilitate the flow of information, resources, learning, and support through relationships and connections (Beaman et al. 2021). Enterprises can enter new or existing social networks by forming strategic alliances, thereby expanding their network relations. These enhanced relationships enable firms to accelerate the dissemination of innovations, improve market adaptability, and strengthen their learning capabilities (Chan et al. 2023; Frattaroli and Herpfer, 2023). Dynamic capability theory posits that organisations need to constantly evolve and reconfigure their resource deployment strategies to remain responsive to fast-paced environmental shifts. Strategic alliances serve as a crucial dynamic capability that enables firms to respond swiftly to market and technological changes (Dwivedi et al. 2023). Studies show that strategic alliances enable enterprises to rapidly acquire new technologies and market information, allowing them to promptly adjust their strategies and maintain flexibility and innovation (Li et al. 2013; Amici et al. 2013). Institutional theory asserts that a firm functions as an economic actor whose behaviour is shaped by surrounding cultural expectations, societal norms, and regulatory frameworks. Strategic alliances enable firms to adapt to or shape their institutional environment (Vayanos and Woolley, 2013). The literature suggests that through strategic alliances, enterprises can better adapt to or influence the institutional environment, manage the pressure of policies and regulations, and enhance their legitimacy and social reputation (Vasudeva et al. 2013; Iurkov et al. 2024).

Building on these theoretical foundations, numerous studies have examined enterprises’ strategic alliances within specific and significant domains. The literature on R&D alliances suggests that firms form alliances to prioritise innovation and technological development. Such alliances are designed to enhance participating firms’ R&D capabilities, shorten product development cycles, share technical risks, and bolster market competitiveness through collaborative efforts (Oxley and Sampson, 2004; Sampson, 2005; Li et al. 2012). Within supply chain alliance frameworks, existing research highlights that the main focus is on enhancing the efficiency, adaptability, and competitive strength of the entire supply chain network, facilitating information sharing, resource and capability complementarity, and risk sharing, thereby enabling firms to better navigate rapidly changing markets and technological environments while enhancing supply chain sustainability, performance, and efficiency (Yang, 2009; Sambasivan et al. 2013; Park et al. 2018). Studies on strategic alliances with competitors highlight that even in competitive contexts, participants can achieve win–win outcomes by engaging in cooperative activities such as resource sharing and knowledge exchange, thereby expanding market potential and innovation capabilities (Chun et al. 2017; Cui et al. 2018; Kepler, 2021). Furthermore, value creation and appropriation are dynamically intertwined in competitive alliances. The cooperative phase focuses on shared-value creation, whereas the competitive phase emphasises value distribution and appropriation. This type of dynamism necessitates that firms adapt their strategies flexibly to evolving relationships and market conditions (Duysters et al. 2020). Finally, the literature on strategic alliances between banks and enterprises indicates that such alliances can enhance firms’ operational efficiency, reduce financing costs, and optimise capital structures through financial services and solutions (Gerlach, 1987; Marciukaityte et al. 2009). Simultaneously, these alliances contribute to banks’ increased business income and market competitiveness (Kim et al. 2010).

Prior research illustrates how different theoretical perspectives account for the influence of strategic alliances on corporate governance, with some studies focusing on specialised alliances established by firms to fulfil targeted goals. Expanding upon this groundwork, this study applies the theoretical lens of specialised strategic alliances, specifically within the realm of environmental protection, to investigate how such alliances influence firms’ green innovation performance.

Review of antecedents of green innovation

Gaining insight into the drivers behind green innovation is essential for firms aiming to pinpoint the elements that facilitate or obstruct the implementation of environmentally friendly technologies and sustainable practices. Consequently, the existing literature has primarily explored these antecedents, categorising them into the following two main types: external and internal driving factors. Several external drivers of green innovation have been identified, including policies and regulations, market demand, industry pressure, technological advancement, and international cooperation. For instance, Johnstone and Haščič (2010) found that governmental renewable energy policies, particularly those offering economic incentives such as subsidies and tax breaks, significantly increase the number of patent applications in relevant technological fields. Wei et al. (2023) highlight that customer demand for green development influences suppliers’ green innovation efforts. Chen et al. (2024a, 2024b) emphasise that a government focus on environmental issues fosters green innovation, particularly among heavily polluting enterprises. Yu et al. (2021) found that engaging in strategic partnerships allows firms to access novel technological insights and expertise, which in turn supports the advancement and implementation of eco-friendly technologies. Song et al. (2015) highlighted the significant influence of international collaboration in promoting eco-innovation during R&D, particularly in the context of the globally integrated manufacturing industry.

The internal drivers of green innovation include organisational resources and capabilities, corporate strategy and culture, technical expertise, organisational structure, and leadership commitment. These elements influence how firms allocate resources to and advance environmental technologies and sustainable practices. In particular, Hart (1995), building on resource-based theory in relation to firms, underscores that a company’s internal competencies and resource endowments serve as key enablers of green innovation. Cordano and Frieze (2000) highlighted that individuals’ environmental concerns within organisations significantly influence corporate environmental actions. Notably, senior managers of environmental awareness can effectively drive organisations to adopt environmental measures, thereby fostering green innovation. Cohen and Levinthal (1990) assert that an enterprise’s absorptive capacity directly impacts its ability to innovate. Firms with greater absorptive capacity can acquire and utilise external knowledge more effectively, thereby enhancing their innovation efforts. Ahuja (2000) suggests that by bridging structural holes within networks, enterprises can access a more diverse array of information and knowledge, increasing their potential for problem-solving and innovation, particularly in environmental technologies. Egri and Herman (2000) contend that leaders who prioritise environmental values frequently adopt transformational, participative, or blended leadership approaches. These styles tend to foster employee involvement and stimulate innovation, thereby reinforcing the organisation’s dedication to sustainable environmental practices.

Current research presents a thorough exploration of the various internal and external factors that drive green innovation, shedding light on how both organisational dynamics and external conditions influence firms’ strategies and actions related to environmental innovation. However, it largely overlooks the role of environmental protection strategic alliances, which are critical strategic choices, in driving green innovation. This study seeks to fill this research gap by investigating how environmental-protection-focused strategic alliances influence the mechanisms driving corporate green innovation, thereby contributing to a deeper understanding of the fundamental factors leading to green innovation.

Research hypothesis proposed

Green innovation at the enterprise level is a complex, resource-intensive, and inherently risky undertaking that spans multiple disciplines. It requires not only continuous investment in research and development and strong technological assimilation abilities but also significant initial funding and specialised expertise. From a resource input perspective, R&D and the implementation of green technologies typically require long-term and stable financial support, which includes the acquisition of costly environmental protection equipment, R&D funding, and certification expenses (Ferreira et al. 2018). For enterprises with limited financial resources, such financial constraints directly impede their ability to invest in environmental protection, preventing potential green innovations from being translated into practical applications. Furthermore, when viewed through the lens of knowledge acquisition and technological assimilation, green innovation is marked by a high degree of specialisation and swift advancements in technology. Enterprises must continuously acquire new environmental knowledge, adapt to evolving technical standards, comply with regulatory requirements, and internalise these elements into their organisational capabilities (Kozlenkova et al. 2014). However, many enterprises, particularly those outside the environmental sector, suffer from significant deficiencies in green technology reserves, management experience, and specialised talent. Consequently, even when these enterprises possess sufficient capital, they face considerable challenges in effectively identifying, assimilating, and implementing green innovation initiatives. Therefore, the dual scarcity of environmental protection funding and environmental knowledge represents the primary barrier to enterprise-level green innovation.

Strategic environmental alliances serve as crucial platforms for enterprises to overcome the aforementioned challenges. From a resource-based perspective, strategic alliances for environmental protection significantly enhance an enterprise’s investment capacity in environmental protection through resource integration and synergistic allocation. Alliance members can mitigate the acquisition costs and uncertainties associated with environmental technologies by sharing resources, such as environmental protection equipment, green technologies, and project experience. Moreover, they can collectively shoulder the financial burden and implementation risks of large-scale environmental protection investment projects (Makpotche et al. 2024; Kim et al. 2021). This collaborative approach effectively increases enterprises’ willingness to invest in environmental protection. Furthermore, through information-sharing mechanisms within an alliance, enterprises are better equipped to understand policy guidelines and market trends, thereby improving their knowledge of the anticipated benefits of environmental compliance investments. Consequently, their motivation and ability to allocate resources for environmental sustainability are significantly strengthened. (Delmas and Toffel, 2004). Enhancing firms’ financial capabilities to support environmental initiatives significantly improves their potential to implement sustainable production methods, reduce energy consumption, and manage pollution. Simultaneously, it helps overcome the major challenge of limited funding often faced in pursuing green innovation. Consequently, this cooperative strategy significantly enhances the extent to which firms implement environmentally sustainable innovations.

In terms of knowledge and network theories, environment-focused strategic partnerships are instrumental in promoting the spread and circulation of environmental expertise. These alliances establish organisational networks involving multiple stakeholders, fostering frequent interactions and the exchange of best practices among participating firms. Such collaboration helps dismantle existing knowledge boundaries and promotes a collective learning process (Stuart, 1998; Chen and Chen, 2002). Through this process, enterprises not only acquire green technologies and managerial expertise from alliance partners but also continuously refine their internal innovation processes via practical exchanges. Such collaborations accelerate the assimilation and secondary development of new technologies (Song et al. 2015). Knowledge acquisition enables firms to overcome existing technological barriers and, more importantly, substantially reduces the trial and error and learning costs associated with green technological innovation. In addition, knowledge diffusion can yield practical benefits, including refined eco-friendly product designs, upgraded manufacturing techniques, and the adoption of alternative clean energy solutions. Collectively, these advancements contribute markedly to improvements in a company’s ability to innovate sustainably. Building on this logic, the following research hypothesis is proposed:

H1: Environmental strategic alliances promote enterprise green innovation.

Research design

Sample selection

The sample for this analysis was drawn from A-share listed companies in Shanghai and Shenzhen, covering 2007–2022. The year 2007 was chosen as the starting point because it represents the first instance of companies disclosing environmental protection strategic cooperation agreements, and complete data for the relevant variables are accessible from that time; the study period ends in 2022, which is the latest year for which complete data are available. Financial and corporate governance information for the listed companies was sourced from the China Stock Market and Accounting Research (CSMAR) database. Information on environmental protection strategic alliances was extracted from company announcement texts in the Chinese Research Data Services Platform (CNRDS) database using Python-based text recognition and semantic analysis techniques. The stock codes of the alliance partner companies were manually obtained using the equity penetration feature on the “Qichacha” platform, referencing the partner names disclosed in the announcements.

Model setting

Drawing on the research approaches of Zhou et al. (2021), this study utilised Model (1) to explore the connection between strategic alliances for environmental protection and corporate green innovation, as follows:

$${{Gin{v}}}_{i,t}={\alpha }_{0}+{\alpha }_{1}{{Allianc{e}}}_{i,t}+{{Control{s}}}_{i,t}+{{Firm}}+{{Year}}+{{Ind}}+{\varepsilon }_{i,t}$$
(1)

where i refers to a specific company and t indicates the year, the variable Ginvi,t represents the level of green innovation of company i in year t, and the variable Alliancei,t is a binary indicator of whether company i was involved in an environmental protection strategic alliance in year t. To account for the impact of unobserved factors associated with firm characteristics and time-related effects on the results, the model includes firm-fixed effects (Firm), year-fixed effects (Year), and industry-fixed effects (Ind). The terms εi,t denote random error components. Continuous variables underwent a 1% tail reduction, and robust standard errors were corrected using the clustering method at the firm level during the regression analysis.

Variable settings

Green innovation (Ginv)

Adopting the approach of Kim et al. (2021), this study measured green innovation using the natural logarithm of the annual count of green invention patents granted to a firm, including both independently filed patents and those jointly filed by the enterprise within the same year. The choice to use the total count of green invention patents, including both independently and jointly filed applications, as the measure of green innovation was undertaken for the following reasons. First, compared to the utility model and design patents, invention patents entail higher standards for technical originality and innovation, thereby offering a more accurate reflection of a firm’s green technological capabilities and R&D investment. Second, incorporating both independent and joint patent applications captures not only the firm’s capacity for independent innovation but also the extent of its collaborative efforts in green technology with external partners, such as research institutions and allied enterprises. This combined metric offers a more thorough and representative gauge of a firm’s green innovation performance, reflecting aspects such as comparability, representativeness, and depth of innovation.

Environmental protection strategic alliance (GAlliance)

This variable indicates whether a firm forms a strategic alliance centred on environmental protection during a specific year. It was constructed based on a combination of text mining and manual semantic recognition. The specific operational procedures were as follows. First, this study employed Python for text mining of strategic alliance announcements disclosed by listed companies in the CNRDS database. It identified whether the titles and bodies of these announcements contained keywords such as “green”, “environmental protection”, and “energy saving” (see Appendix A for the complete keyword list), thereby preliminarily screening announcements potentially related to environmental protection strategic alliances. Second, to enhance the accuracy of sample identification, the announcement texts preliminarily selected through procedural screening were manually reviewed to assess whether the strategic cooperation explicitly involved environmental protection initiatives, based on contextual analysis. Only when the content of the cooperation clearly indicated an intention toward green environmental collaboration and included specific action plans was the alliance classified as an environmental protection strategic alliance. Finally, through adopting the method used by Chen et al. (2015) to determine the duration of general strategic alliances, this study standardised the validity period of each environmental protection strategic alliance to three years. Specifically, if a firm entered an environmental protection strategic alliance agreement in year t, it was regarded as being in an active collaboration phase during years t, t + 1, and t + 2. During this period, the variable GAlliance was assigned a value of 1; otherwise, the value was set to 0. If an announcement explicitly stated “termination of the alliance”, “failure of cooperation”, or “cessation of implementation”, the alliance was deemed to have ended in the year of disclosure. In such cases, regardless of the duration of the original agreement, the alliance was excluded from the cooperation period in subsequent years and the value of GAlliance was set to 0.

Control variables (Controls)

To enhance the precision of model estimation, this study incorporated a range of firm-specific characteristics as control variables, alongside the primary explanatory variables. In line with the method used by Makpotche et al. (2024), the chosen control variables covered three key aspects: fundamental firm characteristics, financial condition, and corporate governance framework. These variables were included to control for the possible influence of external factors that could confound firms’ green innovation activities.

First, regarding the fundamental characteristics of the firm, control variables such as enterprise size (Size), the asset-liability ratio (LEV), and return on total assets (ROA) were incorporated. Larger companies often have more robust R&D infrastructure, enhanced resource allocation capabilities, and a higher likelihood of consistently participating in green innovation efforts. A higher asset-liability ratio may constrain the financial resources available for discretionary investment, thereby limiting the development of green technology. ROA reflects a firm’s overall profitability and influences its financial stability and capacity to tolerate the risks associated with long-term green R&D initiatives.

Second, we controlled for whether a firm was operating at a financial loss. Loss-making enterprises typically face heightened financial constraints and are more likely to prioritise short-term financial performance, which may lead to a reduction in green technology investment owing to increased risk aversion.

Finally, with respect to the corporate governance structure, this study controlled for several key variables: the shareholding ratio of senior executives (Mshare), size of the board of directors (Board), ownership concentration of the largest shareholder (Top1), and degree of equity balance (Balance). A higher ownership stake among senior executives may incentivise them to focus on long-term sustainable development, thereby increasing their willingness to pursue green strategies. Board size affects governance effectiveness, which subsequently affects a company’s capacity to foster green innovation. Ownership concentration and equity balance reflect the power dynamics among shareholders, which ultimately influence a firm’s capacity to translate green investment intentions into actionable decisions.

These control variables were classified into three dimensions: enterprise resource endowment, business performance, and governance mechanisms. This categorisation helped to isolate the influence of non-core variables on firms’ green innovation and enhanced the explanatory power and causal identification of the regression results. Table 1 provides the definitions and calculation methods of the specific variables.

Table 1 Variable definitions.
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Empirical analysis

Descriptive statistics

Table 2 presents the descriptive statistics of the main variables. The green innovation variable (Ginv) had a maximum value of 6.746 and a minimum value of 0, indicating significant variability in green innovation performance across the firms in the sample. The median value was 0, and the mean was only 0.272, which was significantly lower than the maximum, indicating that the majority of firms either did not engage in green invention patenting or maintained only a minimal level of such activity during the study period. Overall, the level of green innovation remained relatively low across the sample. This result is consistent with the findings of previous studies, including Li et al. (2023) and Liu et al. (2025), indicating that Chinese companies are still in the early or non-standardised phase of green patent production.

Table 2 Descriptive statistics.
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The variable GAlliance had a mean value of 0.043 and a standard deviation of 0.203, suggesting that ~4.3% of the sample firms engaged in an environmental strategic alliance during any given year, reflecting a relatively low incidence rate. However, from the perspective of a “specialised strategic alliance,” such a low frequency is theoretically justifiable. Zou et al. (2024) and Chemmanur et al. (2023) emphasise that specialised strategic alliances—such as R&D alliances and supply chain alliances—are typically established among a specific subset of firms, particularly those with established environmental reputations or those facing substantial external policy pressure. Consequently, although the mean value of the GAlliance variable was relatively low, it captured the fundamental nature of environmental strategic alliances as a “scarce yet efficient” form of specialised collaboration.

Concerning the control variables, Size had a mean value of 22.19, which suggests that the sample was predominantly composed of medium-to-large publicly listed companies, consistent with Chen et al. (2024a, 2024b), who observed that larger firms tend to foster green innovation more effectively. LEV had a mean value of 0.436, indicating a moderate level of leverage across the firms in the sample. This result supports the contention of Wang et al. (2024) that firms with moderate levels of debt are more inclined to pursue green innovation. Furthermore, ROA has a value of 0.039, indicating that most firms experienced stable financial performance and had sufficient surplus capacity to invest in innovation. This finding supports the conclusion of Lei et al. (2025), who highlight that strong financial conditions are favourable for green corporate innovation.

The mean value of TOP1 was 33.96%, reflecting a relatively high level of control concentration, which aligns with the results of Makpotche et al. (2024), who highlight that concentrated ownership improves shareholder oversight, which, in turn, promotes green innovation within companies. The mean value of Mshare was 12.11%, indicating that most companies had managerial incentives in place, an arrangement that, according to Zhao et al. (2025), is theoretically favourable for encouraging green innovation. These statistics further highlight the representativeness of the sample, offering a strong basis for ensuring the internal validity of the regression analysis.

Empirical analysis

Table 3 displays the findings of the benchmark regression that explored the connection between strategic environmental alliances and corporate green innovation. The regression coefficient for the environmental strategic alliance variable (GAlliance) was 0.057, statistically significant at the 1% level. This finding suggests that involvement in strategic environmental alliances has a significant positive impact on corporate green innovation. This result supports H1.

Table 3 Main regression test.
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The regression outcomes for the control variables generally aligned with the results reported in previous studies. For example, the coefficient for Size was 0.055, which was statistically significant at the 1% level. This finding suggests that larger firms have more resources and higher risk tolerance, enabling them to pursue green innovation, which is consistent with Chen et al. (2024a, 2024b). Similarly, the coefficient for Mshare was positive and significant at the 5% level, indicating that managerial equity incentives increased executives’ likelihood of adopting long-term green strategies. This finding is consistent with Zhao et al. (2025), who highlight the importance of internal incentives in fostering a green strategic orientation. Moreover, Loss showed a notable negative impact on green innovation, with a coefficient of −0.023, which was statistically significant at the 5% level. This result implies that companies facing financial difficulties tend to cut back on green R&D investments, which are generally long-term and involve extended payback periods, which is consistent with the findings of Zhang et al. (2024).

Endogeneity discussion

Mitigating the impact of measurement errors

Given that reliance on a single measurement approach may introduce measurement errors, potentially affecting the accuracy of model estimates and the reliability of the conclusions, this study employed alternative measurements of core variables to test the robustness of the primary findings.

First, concerning an alternative measurement for the environmental protection strategic alliance variable, this study adopted the methodology of Wen et al. (2023) and used text analysis to reassess the level of firms’ involvement in these alliances. Specifically, the analytical sample consisted of strategic alliance announcements made by listed companies, with the frequency of keywords related to environmental protection in these announcements being measured. Higher keyword frequency indicates greater attention to environmental issues and a deeper level of engagement in alliance-based cooperation, reflecting a firm’s commitment to embedding environmental concerns in its core strategic agenda. To construct the alternative variable GAlliance1, keyword frequency was incremented by one and then transformed using a natural logarithm to quantify the actual level of firm participation in environmental protection through strategic alliances.

Second, as part of the alternative measurement of green innovation, this study extended the original index by incorporating two additional indicators: the number of green utility model patents filed independently and the number of those fields filed jointly, which typically cover application-oriented technologies such as green production equipment, process innovations, and methods aimed at energy conservation and consumption reduction, particularly in manufacturing and related sectors. Their inclusion allowed a more comprehensive assessment of firms’ green technological innovation, thus complementing invention patents by capturing practical and implementation-level innovation activities. To construct the alternative variable Ginv1, the total number of the four types of green patents was aggregated, incremented by one, and then transformed using the natural logarithm.

The regression outcomes with alternative variables confirmed that the positive influence of environmental protection strategic alliances on green innovation continued to be statistically significant (see column (1) of Table 4). Additionally, the direction of the estimated coefficient aligned with that of the main model, suggesting that the key findings of this study remained robust after alternative measurement methods had been used.

Table 4 Endogeneity test.
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Addressing the influence of mutual causation

Although this study accounted for various firm-level variables and included fixed effects, the possibility of endogeneity due to reverse causality remained a concern. Firms with strong green innovation capabilities and higher levels of environmental governance tend to be more environmentally conscious and are, therefore, more inclined to engage in green collaborations, including participation in environmental protection strategic alliances. This dynamic could lead to a two-way causal link between a firm’s green innovation performance and its participation in alliances, introducing potential endogeneity due to mutual causation, which could distort the results of the benchmark regression.

To mitigate these potential endogeneity issues and enhance the reliability of the causal inferences, this study applied a two-stage least-squares (2SLS) approach. The fundamental concept behind this method is to separate the endogenous part of the explanatory variable using an exogenous instrument. This instrument should be strongly correlated with the endogenous regressor, but not with the error term of the dependent variable, thus enhancing the precision of the causal estimates.

According to Wassmer (2010), firms’ choices to engage in strategic alliances are frequently shaped by the behaviour of other companies within their industry. When other companies within the same industry widely engage in environmental protection strategic alliances, they become more likely to follow suit, driven by competitive pressure, resource complementarity, or institutional imitation. Drawing on the theoretical framework and methodological approach of prior research, this study created an instrumental variable, IV, defined as the proportion of other publicly listed firms in the same industry that were involved in environmental protection strategic alliances during the previous year. The construction of this instrumental variable can be considered methodologically sound for two primary reasons:

① Relevance: In line with institutional diffusion theory and the empirical findings of Wassmer (2010), a firm’s probability of engaging in strategic alliances is strongly affected by the alliance activities of its peer firms within the same industry. Thus, the instrumental variable exhibits a strong correlation with firms’ participation in environmental protection strategic alliances.

② Exogeneity: The instrumental variable is determined entirely by the alliance actions of other companies within the same industry, explicitly omitting the behaviour of the focal firm. Therefore, it is improbable that the instrumental variable would directly affect the firm’s green innovation results, ensuring that the exogeneity condition is met.

The results of the 2SLS regression are presented in Column (2) of Table 4. The positive effect of environmental protection strategic alliances on firms’ green innovation was statistically significant. Additionally, the F-statistic for the instrumental variable in the first-stage regression far surpassed the usual threshold of 10, suggesting that weak instrument bias was not present and validating the instrument’s robust explanatory capacity. These results imply that the main conclusions of this study remained reliable and valid, even when potential reverse causality was considered, thus offering more robust evidence for causal interpretation.

Addressing sample selection bias

The descriptive statistics revealed that only a minority of the firms in the sample participated in environmental protection strategic alliances. Furthermore, notable differences existed in the firm-level characteristics between companies that participated and those that did not. This suggests that alliance participation is unlikely to be random; rather, it reflects a strategic decision made by firms in response to specific contextual factors such as resource endowments, regulatory pressure, or alignment with green development strategies. This non-random selection may have resulted in sample selection bias. Specifically, firms that participate in strategic alliances for environmental protection may inherently possess stronger green innovation capabilities and higher environmental awareness. This self-selection mechanism may introduce endogeneity into the estimation, potentially resulting in an inflated estimate of the impact of alliance participation on green innovation.

To correct for sample selection bias, this study adopted the methodology of Lee et al. (2022) and utilised the entropy balancing technique to adjust the weights of the sample observations. This semi-parametric reweighting method was used to align the distribution of covariates in the treatment group (firms involved in environmental protection strategic alliances) with that of the control group (firms that did not participate). By aligning these covariate distributions, the method effectively reduced the systematic bias arising from the non-random sample selection. To implement the entropy-balancing procedure, this study defined participation in an environmental protection strategic alliance as a treatment variable. The covariates included Size, LEV, ROA, Loss, Mshare, Board, TOP1, and Balance1. These variables comprehensively reflect firms’ resource endowments, profitability, and corporate governance structure, which are key factors influencing a firm’s strategic decision to voluntarily engage in green collaboration. The regression outcomes for the reweighted sample are shown in Column (3) of Table 4. The positive impact of environmental protection strategic alliances on firms’ green innovation continued to be statistically significant, suggesting that the core findings were not influenced by sample selection bias, further affirming the robustness of the analysis.

Testing using the DID method

Eliminating potential endogeneity arising from omitted variables remained challenging. In particular, unobservable and time-invariant firm characteristics such as a firm’s strategic orientation toward green innovation, its environmental culture, and the values held by its management team may simultaneously influence both participation in environmental protection strategic alliances and green innovation outcomes, thereby introducing bias into the estimated results. To address these potential endogeneity issues, this study adopted a combined identification strategy using entropy balancing and the DID method to enhance the validity and robustness of the causal inference. In contrast to directly using the DID approach only, the combined strategy of “entropy balancing + DID” allowed for adjustment for structural disparities in covariates between the treatment and control groups. By ensuring full covariate balance prior to DID estimation, this approach yielded more reliable and interpretable results.

In this study, the year in which a firm first joined an environmental protection strategic alliance was designated as the event year. The treatment variable, GAlliance2, was defined as 1 beginning in the year of the event and remained 1 in all subsequent years, while it was assigned a value of 0 for all other years. The entropy balancing technique was used to adjust the sample weights. This method involved reweighting both the treatment group (firms involved in environmental protection strategic alliances) and the control group (firms not participating), ensuring that higher-order moments, including means and variances, of key covariates were aligned across the groups and that there was covariate balance prior to estimation, while mitigating structural differences arising from sample selection bias. The covariates included Size, LEV, ROA, Loss, Mshare, Board, TOP1, and Balance1. Next, using a reweighted and balanced sample, a multi-period DID model was developed. This model enables advantage to be taken of both the temporal variation surrounding the event and the cross-sectional differences between the treatment and control groups, which effectively controlled for unobserved firm-specific characteristics that were constant over time, thereby further mitigating the endogeneity arising from omitted variables.

In summary, the integrated method of entropy balancing and DID not only strengthened the comparability between the treatment and control groups but also bolstered the reliability of causal inference. This approach enabled a more precise estimation of the overall impact of strategic alliances on green corporate innovation. As presented in Column (4) of Table 4, the positive effect of alliance participation on green innovation remained statistically significant even after considering variations in the sample structure and unobserved heterogeneity. This further confirmed the robustness of the key findings of this study.

Testing without policy interference

Within the framework of green development, substantial regional- and industry-level variations in environmental policies exist. These external institutional factors may influence firms’ green innovation activities through policy incentives or preferential resource allocation, potentially having a confounding effect in relation to the connection between involvement in environmental protection strategic alliances and green innovation outcomes. Specifically, cities at the prefecture level that are part of the national “low-carbon pilot city” initiative have demonstrated more robust environmental policy enforcement and have received greater public resource backing than cities that are not included in the programme (Liu et al. 2023). These institutional advantages increase the likelihood that firms within these regions will engage in green innovation and may prompt them to proactively participate in environmental protection strategic alliances. This policy-driven linkage effect introduces endogeneity by simultaneously influencing alliance participation and innovation outcomes. Conversely, companies in high-polluting industries face stricter environmental regulations and increased pressure to adopt green transformations. Their green innovation activities may be driven primarily by regulatory compliance rather than the incentives associated with strategic alliances (Chen et al. 2024a, 2024b). If these contextual factors are not suitably controlled for, the estimated impact of environmental protection strategic alliances on green innovation may be overstated.

To eliminate the potential confounding effects of policy-related factors, we conducted additional robustness tests based on targeted sample exclusions. First, firms located in national low-carbon pilot cities were excluded to control for the influence of region-specific policy interventions. Second, to account for variations in regulatory stringency across industries, firms in heavily polluting sectors, as defined by the Ministry of Environmental Protection, were excluded. The two subsamples were analysed independently, and the corresponding regression outcomes are displayed in Columns (5) and (6) of Table 4. The results reveal that, even after excluding firms based in low-carbon pilot cities or those in high-pollution industries, the positive effect of environmental protection strategic alliances on corporate green innovation continued to be statistically significant, and the direction and statistical significance of the coefficients aligned with those found in the main regression. These results suggest that the core conclusions of this study were not driven by regional- or industry-level heterogeneity in environmental policy, thereby reinforcing the validity and robustness of the findings after accounting for potential policy interference.

Addressing contingencies

While the model accounted for various observable variables and included fixed effects, it was still necessary to verify that the estimation results were not affected by random factors or potential issues in model specification when evaluating the causal effect of environmental protection strategic alliances on firms’ green innovation. This issue is especially pertinent in studies where endogeneity could be a factor. If the observed impact of the key explanatory variable on the dependent variable is influenced mainly by the sample design or definitions of the variables, the regression coefficient, despite being statistically significant, could indicate spurious significance rather than a genuine causal link.

To further evaluate the robustness of the primary findings, this study adopted the method used by Eggers et al. (2024) and performed a placebo test using Model (2) to determine whether the observed outcomes could be influenced by random factors. Specifically, the core explanatory variable GAlliance was randomly reassigned while preserving its distributional structure. This procedure broke the actual economic link between GAlliance and green innovation, thereby simulating a counterfactual scenario in which any observed relationship was purely due to random variation. If the placebo regression yielded statistically significant results, this might indicate a potential model misspecification or bias. Conversely, if the placebo variable showed no significant effect while the original variable remained statistically significant, this would reinforce the validity of the model and address concerns regarding potential model specification issues or reverse causality.

Therefore, this study randomly reallocated the values of the core explanatory variable GAlliance based on the actual proportion of firms involved in environmental protection strategic alliances while maintaining the original distribution of 1 and 0 s. Specifically, the assignment order was shuffled randomly to construct a placebo variable, GAlliance_random, thereby eliminating any real economic associations with the outcome variable. The specifications of all the other variables in the model remain unchanged. The baseline regression was then re-estimated using this randomised variable. To enhance the reliability of the test, the randomisation procedure was repeated 100 times. In every iteration, the regression was re-estimated using the placebo variable GAlliance_random and the resulting coefficients were documented. The distribution of the 100 estimated coefficients was plotted to examine the variability and statistical properties of the simulated results.

As depicted in Fig. 1, most of the coefficients clustered near 0 and lacked statistical significance, suggesting that, when randomly assigned, the environmental protection strategic alliances did not show a consistent effect on green innovation. By comparison, the estimated coefficient of the actual variable GAlliance was 0.057 (see Table 2), which was well outside the simulated distribution generated by the placebo test and fell within a statistically significant range. This suggests that the observed effect was unlikely to be the result of random variation and instead reflected a meaningful relationship with both statistical and economic significance. In conclusion, the placebo test results strengthened the credibility of the causal identification strategy used in this study, showing that the positive impact of environmental protection strategic alliances on corporate green innovation could not be explained by random variations or model specification errors but was instead backed by a solid empirical foundation.

Fig. 1
Fig. 1
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Placebo test.

Further analysis

Channel analysis

Promoting environmental protection investment channels

Based on the theoretical reasoning and the research hypotheses of this study, strategic alliances for environmental protection may promote green innovation by enhancing firms’ willingness to invest in environmental protection. These alliances reduce the costs and uncertainty associated with acquiring environmental technologies and implementing projects. By sharing experience, equipment, and policy information, these collaborations improve firms’ expectations of returns on environmental compliance investments (Delmas and Toffel, 2008; Kim et al. 2021; Makpotche et al. 2024), thereby strengthening their motivation to increase environmental protection expenditures. Enhancing firms’ abilities to invest in environmental protection enables them to overcome the key constraint of insufficient funding for green innovation. Consequently, this promotes the research, development, and implementation of green technologies, enhancing enterprises’ overall green innovation capabilities.

To further evaluate the validity of the proposed causal pathway, this study used a grouped regression method to examine the relationship between environmental protection strategic alliances, environmental protection investment, and green innovation, with particular emphasis on firms’ ability to invest in environmental protection. Specifically, firms were categorised according to the median level of environmental protection investment; those investing above the median were grouped as high investment firms, whereas those with investments at or below the median were grouped as low investment firms. This categorisation approach was used to explore the differing impacts of environmental protection strategic alliances on green innovation among firms with diverse investment capacities, thus highlighting the role of environmental protection investment in the entire process.

If environmental protection strategic alliances effectively promote green innovation by boosting corporate environmental investment, their influence should be more significant in firms with greater capacity for environmental investment. Firms with greater capacity for environmental protection investment typically possess more comprehensive green project plans, more developed capital management mechanisms, and higher technology absorption capabilities (Li et al. 2022). Consequently, when these firms acquire external green resources through alliances, they are better positioned to rapidly convert them into tangible R&D investments and technological innovations, thereby generating a positive green innovation output. In contrast, firms with lower environmental investment capacity may struggle to significantly improve their green innovation performance, even when provided with alliance resources, owing to their limited ability to effectively convert these resources into actionable outcomes.

For the measurement of environmental protection investment, this study adopted the framework proposed by Hu Jun et al. (2017), using capital expenditures related to environmental protection recorded under the “construction in progress” account as the proxy variable. These expenditures include capital projects directly associated with green production line upgrades; the acquisition of clean production equipment; the construction of pollution control facilities; and similar long-term, specific, and goal-oriented investments. These expenditures provide a more accurate representation of a firm’s substantive investment in green transformation. To account for size-related differences between firms, the amount of environmental protection investment was standardised by dividing it by the firm’s total annual revenue, thereby enhancing the comparability and explanatory power of the measure.

The empirical findings are shown in columns (1) and (2) of Table 5. Column (1) presents the regression results for firms with high environmental protection investment, where the GAlliance coefficient was 0.065, statistically significant at the 5% level. Column (2) displays the results for firms with low environmental protection investment, showing a GAlliance coefficient of 0.041, which was not statistically significant. These results indicate that the positive effect of environmental protection strategic alliances on green innovation is more significant in firms with a greater capacity for environmental protection investment, providing further support for the mechanism by which enhanced investment capabilities boost green innovation.

Table 5 Channel analysis.
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Knowledge spillover channels

Drawing from the theoretical analysis and the research hypotheses presented, environmental strategic alliances function not only as platforms for integrating resources but also as key mechanisms that promote knowledge spillovers and the spread of technology between firms. Through alliance cooperation, member firms facilitate the effective flow and exchange of knowledge by engaging in observation and experiential learning, technological imitation, and the adoption of best practices from their partners. These knowledge spillovers help lower the trial-and-error and learning expenses that firms face in green innovation, thereby accelerating the adoption and implementation of green technologies (Song et al. 2015). Consequently, these spillovers are essential for boosting firms’ abilities to innovate green technologies.

To test the suggested “environmental knowledge spillover” mechanism, this study performed a group-based analysis to explore how the influence of environmental strategic alliances on green innovation differed across various knowledge spillover contexts. This approach was used to assess whether knowledge spillover constitutes a significant transmission channel through which environmental strategic alliances influence green innovation outcomes. If environmental strategic alliances promote green innovation by facilitating knowledge flows and technological exchanges among firms, their positive effects should be more evident among firms exposed to higher levels of environmental knowledge spillovers. This is because, when alliance partners possess a greater capacity for knowledge spillover, cooperating firms are better positioned to access advanced green technologies, managerial expertise, and innovative practices. Such knowledge can be more rapidly absorbed and translated into technological innovation and improvements in production processes. By contrast, in environments characterised by low levels of knowledge spillover, firms encounter fewer learning opportunities, and external knowledge is less likely to be effectively absorbed and converted into internal innovation capabilities. Consequently, the positive effects of strategic environmental alliances are likely to diminish significantly.

To assess environmental knowledge spillovers, this study followed the methodology of Wu et al. (2024a, 2024b) and used the number of green invention patents filed by a firm’s alliance partners within the same year as a proxy variable. Green invention patents are distinguished by significant technological innovation and serve as an indicator of firms’ knowledge assets and technical expertise in the green technology field. A higher volume of these patents filed by alliance partners suggests a greater ability to generate knowledge, thus enhancing the chances that collaborating firms can gain access to valuable environmental insights and cutting-edge technologies.

The stock codes of the listed alliance partners were collected manually using the equity penetration function available on the “Qichacha” platform. These codes were then used to match the data on the number of green invention patents filed by each alliance partner. Using these data, the sample was categorised into high and low environmental knowledge spillover groups, based on the median value. Firms with values above the median were assigned to the high-spillover group, whereas those with values equal to or below the median were assigned to the low-spillover group.

The empirical findings, presented in Columns (3) and (4) of Table 5, show that the regression coefficient for GAlliance was 0.230 in the high-spillover group, with statistical significance at the 5% level. In the low spillover group, the coefficient was 0.144, which was also statistically significant at the 5% level. A formal test comparing the two groups produced a differential coefficient of −0.081, which continued to be significant at the 5% level. These results indicate that strategic environmental alliances have a stronger impact on fostering green innovation in firms situated in high-knowledge-spillover environments, providing empirical evidence for the suggested mechanism in which strategic environmental alliances boost corporate green innovation by facilitating the flow of environmental knowledge.

Heterogeneity analysis

Heterogeneity in relation to local governments ‘environmental concerns'

According to neo-institutional organisational theory, organisations strive to maintain their legitimacy within the institutional field by responding strategically to the legitimacy demands of specific institutional actors (Tina, 2002). In this context, local governments’ focus on environmental issues differs from traditional mandatory institutional arrangements, as it emphasises a broader strategic orientation toward green development and resource allocation within their jurisdiction. When enterprises perceive or ‘sense’ these implicit institutional expectations regarding environmental concerns, they are likely to enhance their environmental protection investments and knowledge acquisition as a strategic response. Consequently, this situation strengthens the influence of environmental protection strategic alliances on corporate green innovation. Consequently, in areas where local governments prioritise environmental concerns, the influence of environmental protection strategic alliances on corporate green innovation is expected to be more significant.

Building on the approach outlined by Liu et al. (2023), this study utilised the occurrence rate of environment-related terminology in municipal government work reports to indicate the level of official focus on environmental issues. The sample was categorised into two groups based on the median level of environmental attention: above and at or below the median. The empirical findings are shown in Columns (1) and (2) of Table 6. In regions with high governmental focus on environmental issues, the regression coefficient for GAlliance was 0.072, which was statistically significant at the 5% level. Conversely, in regions where governmental environmental focus was weaker, the GAlliance regression coefficient was 0.035 and did not reach statistical significance. These results indicate that increased government focus on environmental matters strengthens the impact of environmental protection strategic alliances in fostering corporate green innovation.

Table 6 Analysis of the heterogeneity in government environmental protection focus and environmental protection strategic alliances.
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Heterogeneity in relation to environmental protection strategic alliances

Strategic alliances are generally categorised into equity and contractual alliances, based on whether the involved parties pool resources for a particular company or project (Gulati, 1995). Mowery et al. (1996) reported that equity-based alliances require partners to own shares in each other’s companies or organisations, typically through cash investments or the valuation of technology. These alliances often involve exchanges of personnel and information sharing. Consequently, strategic alliances for equity-based environmental protection are likely to enhance green resource investment and knowledge spillover among enterprises. According to existing research, equity-based strategic alliances foster stronger financial ties between members, involve mutual collateral, and raise exit costs, which, in turn, help reduce opportunistic behaviours (Pateli, 2009). Compared with other forms of alliances, equity alliances generally achieve higher performance and cooperation values, further fostering green investment and knowledge spillovers. Therefore, in an equity cooperation model, strategic alliances for environmental protection are expected to exert a more significant positive impact on corporate green innovation.

This study examined the impact of different alliance modes on environmental protection strategic alliances by dividing them into groups comprised of equity-based alliances and non-equity-based alliances. Information regarding whether an enterprise engaged in an environmental protection strategic alliance through equity participation was manually collected by systematically reviewing the corresponding alliance announcements. The empirical findings are presented in Columns (3) and (4) of Table 6. For equity-based environmental protection strategic alliances, the GAlliance regression coefficient was 0.858, which was statistically significant at the 1% level. By comparison, for non-equity alliances, the GAlliance regression coefficient was 0.064, which was likewise statistically significant at the 1% level. The coefficient 0.858 exceeded the coefficient 0.064, with the coefficient from the difference test between the two groups being −0.443, statistically significant at the 1% level. The empirical findings suggest that equity-based environmental protection strategic alliances have a greater impact on advancing corporate green innovation.

Heterogeneity in relation to Green investors in enterprises

Resource-based theory posits that a firm’s competitive edge stems from its distinctive resources and capabilities (Grant and Baden-Fuller, 2004). Green investors not only offer financial support but also contribute valuable knowledge, networks, and reputational resources (Feng and Yuan, 2024). Green investor involvement strengthens a company’s capacity to obtain and incorporate valuable resources, thus playing a crucial role in fostering green innovation after establishing an environmental protection strategic alliance. Institutional theory highlights that a firm’s actions are influenced by its institutional context in which it functions (Tina, 2002). Green investors, who typically possess a strong sense of environmental protection and social responsibility, encourage enterprises to prioritise environmental sustainability (Barnea et al. 2005). Within this institutional context, firms are more likely to actively pursue green innovation through environmental protection strategic alliances to fulfil the expectations and requirements of green investors, which amplifies the positive impact of environmental protection strategic alliances on green innovation. Moreover, strategic network theory suggests that network relationships formed through strategic alliances facilitate knowledge sharing and innovation (Steen et al. 2006). Green investors not only provide financial support but also introduce additional partners and innovative resources through extensive networks (Tang et al. 2024). Enterprises with green investors are better positioned to leverage these network resources, enabling cross-organisational collaborative innovation within environmental protection strategic alliances, which leads to further significant green innovation outcomes.

This study conducted a comparative analysis focusing on the involvement of green investors in firms. The concept of green investors in this study was based on the approach used by Wang (2022), who compared the “fund main body information table” from his fund market series with the “stock investment schedule” to identify the investment patterns of listed companies. A manual examination was subsequently carried out to assess whether the “investment objective” and “investment scope” of each fund contained terms such as “environmental protection”, “ecological”, “green”, “new energy development”, “clean energy”, “low-carbon”, “sustainable”, or “energy saving”. If these terms were found, the firm was categorised as having green investors; otherwise, it was excluded. The empirical findings are shown in Columns (1) and (2) of Table 7. In the group of green investors, the GAlliance coefficient was 0.076, which was statistically significant at the 1% level. In contrast, the group without green investors showed a GAlliance coefficient of 0.037, which was also significant at the 1% level. The coefficient 0.076 exceeded the coefficient 0.037, and the coefficient from the difference test between the two groups was −0.021, statistically significant at the 1% level. These results indicate that strategic environmental alliances are crucial in driving green innovation in firms with green investors.

Table 7 Analysis of cultural heterogeneity among green investors and alliance partners.
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Heterogeneity in relation to alliance partner cooperation culture

Social capital theory suggests that trust, reciprocity, and network relationships among enterprises can significantly enhance the flow of resources and information sharing (McElroy et al. 2006). A robust culture of cooperation fosters trust and collaboration among the alliance members, reduces communication costs, improves collaborative efficiency, and accelerates the development and application of green technologies. In environmental protection strategic alliances, organisations that maintain a strong spirit of collaboration are more adept at uniting internal strengths with external support, contributing to the advancement of green innovation. Knowledge management theory emphasises that generating, disseminating, and applying knowledge are fundamental processes that drive innovation (Tzortzaki and Mihiotis, 2014). Alliance partner enterprises with a strong cooperative culture place greater emphasis on knowledge sharing and collaborative learning, thereby facilitating the dissemination of technology and experience. Therefore, the stronger the cooperative culture of the alliance partner enterprises, the more effectively they can learn and absorb green technologies and environmental best practices, thereby enhancing their green innovation capabilities. Additionally, innovation ecosystem theory posits that enterprises achieve innovation through collaborative relationships and network interactions within an interconnected innovation ecosystem (Shaw and Allen, 2018). Partners with a strong culture of cooperation are more capable of building and maintaining such ecosystems within environmental protection strategic alliances, thereby enhancing resource complementarity, systematising innovation processes, and ultimately improving overall green innovation performance.

This study adopted the approach of Pan et al. (2019) to quantify firms’ cooperative culture, utilising the occurrence rate of collaboration-related terms in the management discussion and analysis (MD&A) sections as an indicative measure; a grouping analysis is conducted based on the median level of cooperation culture among alliance partner enterprises. Firms exhibiting a cooperative culture with scores higher than the median were categorised into one group, whereas those with scores equal to or below the median were assigned to a separate group. Columns (3) and (4) of Table 7 display the outcomes derived from the empirical analysis. Among firms where alliance partners exhibited a strong culture of cooperation, the estimated coefficient for GAlliance was 0.140, which was statistically significant at the 5% level. Conversely, in the group with a weak cooperative culture, the regression coefficient for GAlliance was 0.002, which was insignificant. These results suggest that when alliance partners share a more robust collaborative culture, the beneficial effect of environmental protection strategic alliances on firms’ green innovation efforts is amplified.

Conclusions and insights

This study revealed that participating in strategic environmental partnerships led to a substantial improvement in firms’ green innovation performance. Examination of the underlying mechanisms showed that such alliances enhanced corporate green innovation potential through two core pathways: stimulating greater environmental investment and encouraging the dissemination of environmental knowledge. Additional investigations provided important insights. First, increased environmental attention from regional authorities amplified the beneficial effects of strategic environmental partnerships on a firm’s capacity for green innovation. Second, strategic partnerships established through equity-based involvement demonstrated a stronger capacity to drive advancements in green innovation. Third, strategic environmental partnerships became more influential in promoting corporate eco-innovation when green institutional investors were involved. Fourth, when partner firms within alliances cultivated a robust cooperative environment, the alliances’ capacity to enhance green innovation was significantly strengthened. Based on these insights, this study offers the following practical policy suggestions.

First, local authorities should strengthen their focus on environmental protection and improve policy implementation to create stable expectations and supportive policy environments for business alliances. In addition, local governments can facilitate green technology exchanges and collaborative R&D within alliances by offering financial subsidies, tax incentives, and access to green credit.

Second, at the industry level, industry associations or chambers of commerce should take the lead in establishing cooperative platforms for environmental protection alliances and advancing the development of standardised practices, information transparency, and technology-sharing mechanisms. Furthermore, these organisations should guide the formation of industry-wide consensus and best-practice paradigms to reduce communication barriers and transaction costs within alliances, thereby unlocking greater potential for green collaborative innovation. Additionally, industry associations can establish platforms for the exhibition and exchange of green technological achievements, thereby enhancing the spillover effects of environmental knowledge across sectors.

Finally, at the firm level, companies engaging in strategic environmental partnerships should initially clearly define their own green strategies and specific innovation goals within the collaborative structure, as well as enhance their capacity to identify and evaluate the alliance’s potential environmental value and associated intellectual property rights. When selecting alliance partners, firms should prioritise collaborators located in regions with robust environmental policy enforcement. Adopting a more binding equity-based alliance model is advisable to improve alliance governance efficiency. Furthermore, enterprises should actively engage with green institutional investors and embed values such as cooperation, openness, and knowledge sharing into their corporate cultures, thereby fostering a synergistic environment conducive to the effective functioning of strategic environmental alliances.