Impact of supplier concentration on low-carbon innovation investment in heavily polluting manufacturing firms: moderating role of cash holdings
by Qiang Meng; Nartraphee Tancho; Kusuma Dampitakse; Yu Chen
International Journal of Simulation and Process Modelling (IJSPM), Vol. 20, No. 4, 2023

Abstract: It is particularly important to promote low-carbon innovation investment of heavily polluting manufacturing firms through the supplier concentration. A pivotal factor in this relationship is the cash holdings of these entities. This study employs a multiple linear regression analysis to scrutinise the influence of supplier concentration on low-carbon innovative investment in heavily polluting manufacturing firms, while concurrently examining the moderating impact of cash holdings. The results indicate an inverted U-shaped relationship between supplier concentration and low-carbon innovation investment among heavily polluting manufacturing firms in China. Prior to reaching a critical threshold, there is an enhancement in low-carbon innovative investment concomitant with an escalation in supplier concentration. However, beyond this point, there is a subsequent, gradual diminution. Cash holdings seem to have narrowed the range of this U-shaped curve, indicating its moderating effect. Specifically, it has led to a rapid increase in low-carbon innovative investment on the left and accelerates the downward trend on the right side.

Online publication date: Mon, 13-May-2024

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