Abstract
Investor sentiment does not only have negative impacts. It may also improve green total factor productivity by invigorating funds. This research constructs a new indicator at the firm level to measure the green total factor productivity of firms. We research the effect of investor sentiment on firms’ green total factor productivity using a sample of Chinese heavy polluters listed on Shanghai and Shenzhen A-shares between 2015 and 2019. Through a series of tests, the mediating role of agency costs and financial situations is confirmed. It is discovered that the digitization of businesses facilitates the effect of investor sentiment on the green total factor productivity of businesses. And when managerial competence reaches a certain threshold, the impact of investor sentiment on green total factor productivity is amplified. Tests for heterogeneity reveal that high investor sentiment has a larger impact on green total factor productivity in firms with superior supervision.
Similar content being viewed by others
Data availability
Data and materials are available from the authors upon request.
References
Affuso E, Lahtinen KD (2019) Social media sentiment and market behavior. Empir Econ 57:105–127. https://doi.org/10.1007/s00181-018-1430-y
Ai H, Hu S, Li K, Shao S (2020) Environmental regulation, total factor productivity, and enterprise duration: evidence from China. Bus Strategy Environ 29(6):2284–2296
Altham W (2007) Benchmarking to trigger cleaner production in small businesses: drycleaning case study. J Clean Prod 15(8-9):798–813
Baker M, Stein JC (2004) Market liquidity as a sentiment indicator. J Financ Mark 7(3):271–299
Baker M, Wurgler J (2006) Investor sentiment and the cross-section of stock returns. J Finance 61(4):1645–1680
Baker M, Wurgler J (2007) Investor sentiment in the stock market. J Econ Perspect 21(2):129–151
Bosse DA, Phillips RA (2016) Agency theory and bounded self-interest. Acad Manage Rev. 41(2):276–297
Chambers RG, Chung Y, Färe R (1996) Benefit and distance functions. J Econ Theory 70(2):407–419
Chen J, Chen K, Wang G, Wu L, Liu X, Wei G (2019) PM2. 5 pollution and inhibitory effects on industry development: a bidirectional correlation effect mechanism. Int J Environ Res Public Health 16(7):1159
Cui X, Wang P, Sensoy A, Nguyen DK, Pan Y (2022) Green credit policy and corporate productivity: evidence from a quasi-natural experiment in China. Technol Forecast Soc Change 177:121516
Das K, Lashkari RS (2015) Risk readiness and resiliency planning for a supply chain. Int J Prod Res 53(22):6752–6771
Debata B, Dash SR, Mahakud J (2018) Investor sentiment and emerging stock market liquidity. Finance Res Lett 26:15–31
Demerjian P, Lev B, McVay S (2012) Quantifying managerial ability: A new measure and validity tests. Manag Sci 58(7):1229–1248
Dong H, Gil-Bazo J (2020) Sentiment stocks. Int Rev Financ Anal 72:101573
Dou J, Han X (2019) How does the industry mobility affect pollution industry transfer in China: empirical test on pollution Haven Hypothesis and Porter Hypothesis. J Clean Prod 217:105–115
Esmaeilifar R, Iranmanesh M, Shafiei MWM, Hyun SS (2020) Effects of low carbon waste practices on job satisfaction of site managers through job stress. Rev Manag Sci 14(1):115–136
Falentina AT, Resosudarmo BP, Darmawan D, Sulistyaningrum E (2021) Digitalisation and the performance of micro and small enterprises in Yogyakarta Indonesia. Bull Indones Econ Stud 57(3):343–369
Fan Q, Zheng Y, Jia W (2022) The spatial non-equilibrium and convergence of chinese grain enterprises’ total factor productivity—evidence from China. Foods 11(18):2843
Garel A, Martin-Flores JM, Petit-Romec A, Scott A (2021) Institutional investor distraction and earnings management. J Corp Finance 66:101801
Gentry RJ, Shen W (2013) The impacts of performance relative to analyst forecasts and analyst coverage on firm R&D intensity. Strateg Manag J 34(1):121–130
Glawe L, Wagner H (2020) China in the middle-income trap? China Econ Rev 60:101264
Guo H, Yin C, Zeng Y (2023) How does firm-specific investor sentiment affect the value of corporate cash holdings? Br J Manag 34(1):410–441
Halbert L, Henneberry J, Mouzakis F (2014) Finance, business property and urban and regional development. Reg Stud 48(3):421–424
Hambrick DC, Mason PA (1984) Upper echelons: the organization as a reflection of its top managers. Acad Manage Rev 9(2):193–206
Hao Y, Chou RK, Ko KC, Yang NT (2018) The 52-week high, momentum, and investor sentiment. Int Rev Financ Anal 57:167–183
Herrmann D, Inoue T, Thomas WB (2003) The sale of assets to manage earnings in Japan. J Account Res 41(1):89–108
Hoque A, Clarke A (2013) Greening of industries in Bangladesh: pollution prevention practices. J Clean Prod 51:47–56
Horsky D, Horsky S, Zeithammer R (2016) The modern advertising agency selection contest: a case for stipends to new participants. J Mark Res 53(5):773–789
Lee CC, Lee CC (2022) How does green finance affect green total factor productivity? Evidence from China. Energy Econ 107:105863
Li B, Liu Z, Wang R (2021a) When dedicated investors are distracted: the effect of institutional monitoring on corporate tax avoidance. J Account Public Policy 40(6):106873
Li J, Wei R, Guo Y (2022a) How can the financing constraints of smes be eased in China?-effect analysis, heterogeneity test and mechanism identification based on digital inclusive finance. Front Environ Sci 10:1020
Li X, Wang Q, Huang S, Shi R, Han C, Gao Y (2022b) The transfer strategy of digital information technology for heterogeneous manufacturers. J Organ End User Comput 34(8):1–22
Lyu Y, Wang W, Wu Y, Zhang J (2023) How does digital economy affect green total factor productivity? Evidence from China. Sci Total Environ 857:159428
Mao K, Failler P (2022) Local government debt and green total factor productivity—empirical evidence from Chinese cities. Int J Environ Res Public Health 19(19):12425
Martinez MG, Zouaghi F, Marco TG, Robinson C (2019) What drives business failure? Exploring the role of internal and external knowledge capabilities during the global financial crisis. J Bus Res 98:441–449
Mian GM, Sankaraguruswamy S (2012) Investor sentiment and stock market response to earnings news. Account Rev 87(4):1357–1384
Muth M, Donaldson L (1998) Stewardship theory and board structure: a contingency approach. Corp Gov: Int Rev 6(1):5–28
Naughton JP, Wang C, Yeung I (2019) Investor sentiment for corporate social performance. Account Rev 94(4):401–420
Newbert SL (2018) Achieving social and economic equality by unifying business and ethics: Adam Smith as the cause of and cure for the separation thesis. J Manag Stud 55(3):517–544. https://doi.org/10.1111/joms.12322
Oh DH (2010) A global Malmquist-Luenberger productivity index. J Product Anal 34:183–197
Ohlson JA (1980) Financial ratios and the probabilistic prediction of bankruptcy. J Account Res:109–131
Polk C, Sapienza P (2008) The stock market and corporate investment: a test of catering theory. Rev Fin Stud 22(1):187–217
Qi Y, Yang Y, Yang S, Lyu S (2021) Does government funding promote or inhibit the financialization of manufacturing enterprises? Evidence from listed Chinese enterprises. N Am J Econ Finance 58:101463
Rajsic P, Fox G (2016) Environmental externalities, comparative advantage, and the location of production: An application to the Canadian dairy industry. Can J Agric Econ/Revue canadienne d’agroeconomie 64(2):311–337
Ren X, Qin J, Jin C, Yan C (2022) Global oil price uncertainty and excessive corporate debt in China. Energy Econ 115:106378
Schönfuß B, McFarlane D, Hawkridge G, Salter L, Athanassopoulou N, de Silva L (2021) A catalogue of digital solution areas for prioritising the needs of manufacturing SMEs. Comput Ind 133:103532
Shen Y, Zhang X (2022) Study on the impact of environmental tax on industrial green transformation. Int J Environ Res Public Health 19(24):16749
Shi Y, Tang YR, Long W (2019) Sentiment contagion analysis of interacting investors: evidence from China’s stock forum. Phys A: Stat Mech Appl 523:246–259
Sievers M, Vandenberg P (2007) Synergies through linkages: who benefits from linking micro-finance and business development services? World Dev 35(8):1341–1358
Solow RM (1956) A contribution to the theory of economic growth. Q J Econ 70(1):65–94
Song M, Peng L, Shang Y, Zhao X (2022a) Green technology progress and total factor productivity of resource-based enterprises: a perspective of technical compensation of environmental regulation. Technol Forecast Soc Change 174:121276
Song Y, Zhang B, Wang J, Kwek K (2022b) The impact of climate change on China’s agricultural green total factor productivity. Technol Forecast Soc Change 185:122054
Tinbergen J (1942) Professor Douglas’ production function. Revue de l’institut international de statistique:37–48
To TY, Navone M, Wu E (2018) Analyst coverage and the quality of corporate investment decisions. J Corp Financ 51:164–181
ur Rehman MA (2021) The impact of investor sentiment on returns, cash flows, discount rates, and performance. Borsa Istanbul Review. https://doi.org/10.1016/j.bir.2021.06.005
Wang MX, Liang LN, Siu WS, Fan D, Sun HR, Zhao HH et al (2019) Loss accounting of environmental pollution within Pearl River Delta region, South China. Environ Pollut 249:676–685
Wang P, Huang S, Yang Z, Guo F (2022) Research on the impact of the environmental protection tax on the green total factor productivity of the enterprises. Taxation Research (11):66–73. https://doi.org/10.19376/j.cnki.cn11-1011/f.2022.11.021. (in Chinese)
Wanli L, Liang C, Yuan K (2023) Can Internet enhance the external governance function of traditional media: based on the perspective of media environment coverage and corporate green innovation. Nankai Bus Rev 1–26. http://kns.cnki.net/kcms/detail/12.1288.f.20230216.1525.010.html
Wei X, Xia W, Sun T (2014) A study on the measurement of investor sentiment in the A-share market based on the BW model. Management Observer (33),71–73+76. (in Chinese)
Wu H, Gai Z, Guo Y, Li Y, Hao Y, Lu ZN (2020) Does environmental pollution inhibit urbanization in China? A new perspective through residents’ medical and health costs. Environ Res 182:109128
Wu X, Li Y, Feng C (2022) Green innovation peer effects in common institutional ownership networks. Corp Soc Responsib Environ Manag 30:641–660. https://doi.org/10.1002/csr.2379
Xiang D, Zhang Y, Worthington AC (2018) Determinants of the use of fintech finance among Chinese small and medium-sized enterprises. In 2018 IEEE international symposium on innovation and entrepreneurship (TEMS-ISIE). IEEE, USA, pp 1–10. https://doi.org/10.1109/TEM.2020.2989136
Yan B, Zhang Y, Shen Y, Han J (2018) Productivity, financial constraints and outward foreign direct investment: firm-level evidence. China Econ Rev 47:47–64
Yang C, Wu H (2019) Chasing investor sentiment in stock market. North Am J Econ Finance 50:100975
Yu J, Yang T, Ding T, Zhou K (2021) “New normal” characteristics show in China’s energy footprints and carbon footprints. Sci Total Environ 785:147210
Zhang J, Yang G, Ding X, Qin J (2022) Can green bonds empower green technology innovation of enterprises? Environ Sci Pollut Res:1–13
Zhang Y, Li X, Song Y, Jiang F (2021) Can green industrial policy improve total factor productivity? Firm-level evidence from China. Struct Change Econ Dyn 59:51–62
Zhao L, Chen L (2022) Research on the impact of government environmental information disclosure on green total factor productivity: empirical experience from Chinese province. Int J Environ Res Public Health 19(2):729
Zou G, Cheng Q, Lv Z, Edmunds J, Zhai X (2017) Investor sentiment and IPOs anomalies: an agent-based computational finance. EURASIA J Math Sci Tech Ed 13(12):7707–7721. https://doi.org/10.12973/ejmste/77931
Author information
Authors and Affiliations
Contributions
Zexia Zhao conceived the topic, combed the relevant literature, and wrote the first draft. Jun Yan collected and collated the data.
Corresponding author
Ethics declarations
Ethics approval
Not applicable.
Consent to participate
Not applicable.
Consent to publish
Not applicable.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Nicholas Apergis
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Zhao, Z., Yan, J. The impact of investor sentiment on firms’ green total factor productivity—facilitator or inhibitor?. Environ Sci Pollut Res 30, 70303–70314 (2023). https://doi.org/10.1007/s11356-023-27204-w
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-023-27204-w