Long-term and short-term effects of green strategy on corporate performance: evidence from Chinese listed companies

Building on the resource-based view (RBV) theory, this paper aims to shed light on how does the implementation of green strategies affect enterprises' performance. To distinguish the evolution of strategy implementation effect, we adopt a panel estimation strategy and gather data from 3869 listed companies in China from 2008 to 2019. Furthermore, we innovatively use the semi-supervised clustering algorithm to classify the companies according to whether they implement green strategies or not and then discuss long-term and short-term financial effects of implementing green strategies. Our study finds that the implementation of green strategy facilitates a company's long-term performance but hampers its short-term performance. According to the moderating analysis, a green strategy could negatively impact a company's financial performance by increasing debt ratios. The findings highlight the importance of implementing green strategies and the obstacles in the process of transforming enterprises to be green.