Abstract
Purpose: This study investigates the impact of managerial myopia on green innovation in Chinese listed companies from 2001 to 2021, focusing on how short-termism undermines sustainable innovation at both firm and industry levels.
Design/methodology/approach: Utilising Management Discussion and Analysis (MD&A) textual analysis and corporate patent data, we employ high-dimensional fixed-effects and robustness tests to assess the relationship between managerial myopia and green innovation. Heterogeneity analysis and mediation models explore variations across firm types and mediating mechanisms, including R&D investment, digital transformation and environmental, social and governance (ESG) management.
Findings/results: Results confirm that managerial myopia significantly inhibits green innovation, with stronger effects in non-state-owned enterprises (non-SOEs), non-heavy polluting firms and non-CEO-duality firms. At the industry level, managerial myopia indirectly suppresses green innovation through reduced R&D investment, limited digital transformation and weaker ESG management, as validated by mediation analysis.
Practical implications: The findings offer policymakers and corporate leaders’ insights into aligning managerial incentives with long-term environmental and economic goals. Encouraging sustainable focus in non-SOEs and enhancing R&D and ESG practices could mitigate the adverse effects of short-termism on green innovation.
Originality/value: This research integrates MD&A textual analysis with patent-based metrics to provide a novel perspective on managerial myopia’s impact on green innovation in an emerging market context. It elucidates nuanced mechanisms – R&D, digital transformation and ESG management – through which short-termism disrupts sustainability, contributing to the literature on corporate governance and environmental innovation.
© 2026 Mingkun Zhou, Simin Yang, Xuhua Qiu, Yun Zeng, Kunjie Zhu | This work is licensed under CC Attribution 4.0
Design/methodology/approach: Utilising Management Discussion and Analysis (MD&A) textual analysis and corporate patent data, we employ high-dimensional fixed-effects and robustness tests to assess the relationship between managerial myopia and green innovation. Heterogeneity analysis and mediation models explore variations across firm types and mediating mechanisms, including R&D investment, digital transformation and environmental, social and governance (ESG) management.
Findings/results: Results confirm that managerial myopia significantly inhibits green innovation, with stronger effects in non-state-owned enterprises (non-SOEs), non-heavy polluting firms and non-CEO-duality firms. At the industry level, managerial myopia indirectly suppresses green innovation through reduced R&D investment, limited digital transformation and weaker ESG management, as validated by mediation analysis.
Practical implications: The findings offer policymakers and corporate leaders’ insights into aligning managerial incentives with long-term environmental and economic goals. Encouraging sustainable focus in non-SOEs and enhancing R&D and ESG practices could mitigate the adverse effects of short-termism on green innovation.
Originality/value: This research integrates MD&A textual analysis with patent-based metrics to provide a novel perspective on managerial myopia’s impact on green innovation in an emerging market context. It elucidates nuanced mechanisms – R&D, digital transformation and ESG management – through which short-termism disrupts sustainability, contributing to the literature on corporate governance and environmental innovation.
© 2026 Mingkun Zhou, Simin Yang, Xuhua Qiu, Yun Zeng, Kunjie Zhu | This work is licensed under CC Attribution 4.0
| Original language | English |
|---|---|
| Article number | a5337 |
| Journal | South African Journal of Business Management |
| Volume | 57 |
| Issue number | 1 |
| Online published | 13 Feb 2026 |
| DOIs | |
| Publication status | Published - 2026 |
Funding
This work was financially supported by the National Natural Science Foundation of China (L2424120, L2524002).
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
-
SDG 9 Industry, Innovation, and Infrastructure -
SDG 12 Responsible Consumption and Production -
SDG 17 Partnerships for the Goals
Research Keywords
- managerial myopia
- green innovation
- digital transformation
- ESG management
- R&D investment
Publisher's Copyright Statement
- This full text is made available under CC-BY 4.0. https://creativecommons.org/licenses/by/4.0/
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