ABSTRACT Corporate green innovation is essential for achieving sustainable development and reconciling economic growth with environmental protection. However, existing research largely emphasizes macro‐level institutional drivers and firm‐level structural characteristics, while overlooking the micro‐level role of managerial capability. This study investigates how managerial ability influences corporate green innovation using panel data from 19,556 firm‐year observations of Chinese A‐share listed firms during 2007–2022. Drawing on Upper Echelons Theory, the Resource‐Based View, and Agency Theory, we develop competing hypotheses regarding the dual effects of managerial ability. Empirical results show that managerial ability significantly promotes corporate green innovation. Mechanism analysis reveals that this relationship operates through agency cost reduction, indicating that capable managers enhance sustainable innovation by improving internal governance efficiency. Furthermore, governance conditions shape this effect: controlling shareholder supervision and equity incentives strengthen the positive impact of managerial ability, whereas media attention weakens it, suggesting a substitutive monitoring role. Robustness tests using entropy balancing, propensity score matching, instrumental variable estimation, and alternative specifications confirm the stability of the findings. By identifying managerial ability as a micro‐foundational driver of green innovation, this study extends the sustainability and corporate governance literature and provides practical insights for promoting innovation aligned with the United Nations Sustainable Development Goals.
Hao et al. (Tue,) studied this question.