Beyond Monitoring,Bridging Innovation: Independent Director Networks and Corporate Green Innovation

Abstract

Green innovation presents distinctive challenges, including technological uncertainty, regulatory complexity and diverse stakeholder demands, yet how firms access external knowledge and resources to overcome these barriers remains underexplored. This study investigates whether the positions that firms occupy within networks formed by shared independent directors influence corporate green innovation performance, using panel data from 7,253 Chinese A-share listed companies during 2013–2023. Employing social network analysis, propensity score matching and generalized method of moments (GMM) estimation, we find that firms with more extensive board connections and those serving as key bridges between otherwise unconnected companies achieve significantly higher green innovation outcomes. These effects are more pronounced in heavily polluted industries and among firms with lower baseline environmental, social and governance (ESG) performance. Further analysis reveals that director networks facilitate green innovation by alleviating financing constraints and reducing managerial short-term orientation. These findings demonstrate that independent directors create value beyond traditional monitoring functions through network-based knowledge transfer and resource mobilization, offering practical insights for board composition decisions in firms pursuing environmental transformation.