Are Good Deeds Rewarded?—The Impact of Traditional Morality and Modern Responsibility on Green Innovation

Abstract

The essence of intergenerational sustainability emphasizes the necessity of incorporating altruistic thinking and culture. While prior studies primarily examined corporate innovation strategies from a self-interested lens, this paper aims to investigate the drivers of corporate green innovation from an altruistic perspective. Analyzing a sample of Chinese A-share listed companies from 2011 to 2019, we employ both the OLS model and the mediation effect model to explore how traditional morality and modern responsibility impact corporate green innovation, as well as the mechanisms underlying this relationship. Our findings reveal that both traditional morality and modern responsibility significantly enhance corporate green management innovation, with social trust serving as a key mediating factor. Furthermore, traditional morality and modern responsibility play distinctive roles depending on the stage of economic development: traditional morality primarily influences green innovation in the early stages of economic development, whereas modern responsibility becomes more influential as development progresses. This study provides meaningful insights for research and practice in corporate sustainability, business ethics, and innovation strategy.

1. Introduction

Promoting sustainable development is essential for achieving long-term prosperity and social progress [1,2]. Sustainable development emphasizes not only meeting the needs of the current generation but also ensuring intergenerational equity, thereby providing future generations with sufficient resources and a healthy environment [3]. Altruistic motivation plays a pivotal role in this process, encouraging behaviors that transcend the immediate, short-term interests of the current generation and focus on the broader, long-term social and environmental impacts, often regarded as acts of goodwill [4,5]. Companies lacking altruistic perspectives may inadvertently contribute to various environmental, social, and economic issues in their pursuit of short-term gains [6]. Thus, identifying ways to encourage businesses to engage in strategic activities motivated by altruistic principles is crucial for the sustainable development transition.

Green innovation is an essential engine for achieving sustainable development [7,8]. Defined as innovation activities aimed at minimizing environmental impacts and promoting resource efficiency through new technologies, products, services, or business models, green innovation has been widely acknowledged in the literature as fundamental to advancing sustainable development goals [9,10]. A large body of empirical literature has demonstrated the importance of green innovation for sustainable development [10,11,12]. Therefore, the topic of green innovation has received increasing attention from scholars.

Previous studies have predominantly examined green innovation through the lens of firms’ motivations and external pressures. From a motivation standpoint, research suggests that firms pursue green innovation to enhance competitiveness, profitability, productivity, reputation, and access to financing [13,14,15,16,17]. From a pressure perspective, the literature suggests that firms are pressured to undertake green innovations by factors such as macro-policies, stakeholders, and market and customer preferences for green [12,18,19]. These analyses largely rest on economic assumptions, such as the rational actor model and shareholder primacy theory, which posit that firms make green innovation decisions solely to further their own interests [20,21]. However, is it a fact that firms can only behave and develop strategies in their own self-interest?

The empathy–altruism hypothesis proposed by Batson et al. [22] suggests that when individuals empathize with others, they are inclined to behave altruistically, even without explicit rewards. Applied to businesses, this theory implies that integrating empathy into core values, corporate philosophy, and culture can encourage employees to prioritize the welfare of others in decision-making, driving altruistic corporate behaviors [23]. Thus, corporate strategies can extend beyond self-interest, incorporating altruistic empathy. However, few studies have examined green innovation drivers through an altruistic lens—a gap this paper aims to address, given that intergenerational sustainability fundamentally requires altruistic thinking and culture [5].

Traditional morality and modern responsibility foster altruistic behaviors by cultivating empathy and encouraging socially conscious actions [24,25]. These cultural values support the development of empathy and drive individuals to engage in actions motivated by altruism, thus contributing to sustainable development and societal welfare. Traditional morality refers to moral values and normative systems passed down across generations within specific communities, regions, or societies [26]. Research suggests that morality, often associated with altruism, can inspire businesses to act with compassion and empathy towards society [27,28]. Modern responsibility, on the other hand, refers to the principle that companies should pursue economic gain while remaining accountable to society and the environment [29,30]. Kanungo and Conger [23] contend that corporate altruism is reflected in activities related to corporate social responsibility. Together, traditional morality and modern responsibility encourage companies to seek harmony with society and nature, shaping a culture of corporate altruism [31]. However, the influence of these values may vary across different stages of economic development. This study, therefore, investigates whether traditional morality and modern responsibility positively influence corporate green innovation from an altruistic motivation perspective.

Furthermore, altruistic behaviors may yield both tangible and intangible benefits for firms [32]. Social capital theory suggests that altruistic actions can help companies build trust within society [33,34,35], thus facilitating the accumulation of resources necessary for green innovation. In this sense, acts of goodwill can generate reciprocal advantages. Yet, few studies have analyzed altruism, social trust, and innovation within an integrated framework. Addressing this, we examine the role of social trust as a mediator in the relationship between corporate altruistic motives and green innovation, grounding our analysis in the empathy–altruism hypothesis and social capital theory. Specifically, we argue that traditional moral culture and modern responsibility promote corporate green innovation by fostering social trust.

Using a sample of Chinese A-share listed companies from 2011 to 2019, we test our hypotheses with an OLS model, suitable for examining linear relationships between variables. This study contributes both theoretically and empirically to the literature on altruism and green innovation. First, we explore the roles of traditional morality and modern responsibility in driving green innovation from an altruistic perspective based on the empathy–altruism hypothesis, providing a complementary view on green innovation drivers. This enhances the green innovation literature by highlighting the importance of corporate altruistic motives for sustainable transformation. Second, by applying social capital theory, we address the conflict between corporate altruism and self-interest in the context of sustainability, promoting a win–win scenario between corporate interests and broader sustainability goals. Finally, our findings inform policy and management practices, offering recommendations to support sustainable development transitions.

2. Theoretical Background and Hypotheses Development

2.1. Theoretical Foundation

In examining the motives behind human behavior, scholars have identified two primary theories of motivation: self-interested motivation, which centers on personal gain and social recognition [36,37], and altruistic motivation, which aims to reduce others’ suffering actively [38,39]. Batson et al. [22] explained altruistic motivation through the lens of empathy, proposing the empathy–altruism hypothesis. This hypothesis posits that when individuals feel empathy toward others, they are driven to act out of concern for others’ well-being rather than self-interest. In a corporate context, this principle implies that firms can embed empathy and consideration for society, the environment, and even future generations into their core values, influencing decision-making that prioritizes societal well-being. This empathetic culture encourages firms to act altruistically in response to social challenges, which aligns with the idea of corporate “good deeds” [24].

This analysis is based on the assumption that the empathy–altruism hypothesis, initially focused on individual-level emotional and ethical drivers, can be extended to the organizational level. Under this assumption, companies are viewed as entities guided by the ethical and moral principles of their key decision-makers, such as executives. Such an approach is consistent with organizational anthropomorphism, which conceptualizes firms as social actors capable of incorporating ethical motivations similar to those of individuals. Consequently, firms may be motivated by a sense of altruistic responsibility to act in the public’s interest when facing social and environmental issues. This assumption has been adopted in previous studies, which similarly apply individual-level ethical and motivational theories to the organizational context [40,41].

Traditionally, research on green innovation has focused on drivers from a self-interest perspective, including factors such as environmental regulations, innovation subsidies, cash flow conditions, financing constraints, and executive compensation [12,42,43,44]. This approach aligns with the Homo economicus model, which assumes that firms operate based on rational, profit-maximizing behavior. However, this study challenges this narrow view by integrating the empathy–altruism hypothesis and social capital theory, offering an alternative perspective that highlights non-economic motivations—such as empathy, altruism, and social trust—as significant drivers of corporate green innovation. By framing firms as social actors capable of altruistic behavior, we expand corporate motivation theory and contribute to a more comprehensive understanding of corporate behavior that transcends profit maximization assumptions.

Green innovation, by nature, embodies altruistic impact [45]. First, it supports sustainable development and creates better living conditions for future generations [46]. Through initiatives such as renewable energy development, circular economy practices, and promoting sustainable consumption, companies contribute to long-term societal welfare, achieving altruistic goals [47,48,49,50]. Additionally, green innovation often requires significant investments in time, capital, and human resources and entails various technological, market, and policy uncertainties [51]. Companies may bear additional costs and risks, potentially facing adverse competitive impacts [52]. In these cases, altruistic motives may drive environmentally conscious decisions, underscoring the role of non-economic drivers in green innovation. The empathy–altruism hypothesis thus provides a framework for understanding why some firms are willing to invest in green innovation, even if it does not yield immediate financial returns. This perspective offers a richer understanding of firms’ sustainability strategies.

Nevertheless, even altruistically motivated firms must address the practical need to ensure that their activities generate a sustainable return [20,21]. This requirement is a focal concern for managers, executives, and investors, and it partially explains why altruistic motives are often underexplored in corporate strategy research. Typically, scholars assess the effectiveness of firm strategies through the lens of cost–benefit analysis [53], with the expectation that firms’ activities should generate returns to cover costs. While altruistic behaviors—voluntary actions taken to benefit others without expecting direct personal rewards—may sometimes be seen as unprofitable burdens [6,54], they can also foster trust. Observing selfless actions can make people more inclined to trust those who perform them [55]. According to social capital theory, trust is a fundamental element of social capital [56], facilitating cooperation and coordination through mutual reliance [33]. Green innovation requires interdisciplinary and cross-sectoral collaboration in resources and knowledge to obtain broader support, thereby accelerating the development and application of green technologies [57,58]. Strong trust relationships can promote the flow of resources and knowledge, making the green innovation process smoother and more efficient [59]. Thus, corporate altruism not only enhances social trust but also accumulates the capabilities and resources essential for successful green innovation. Through altruistic empathy, firms can build social trust, creating favorable conditions for collaborative innovation—a reciprocal reward for their good deeds.

In sum, this paper explores how traditional moral culture and modern responsibility influence green innovation through the empathy–altruism hypothesis and social capital theory. By conceptualizing firms as moral agents capable of altruistic behavior, this study enhances our understanding of the non-economic motivations that drive corporate sustainability efforts.

2.2. Traditional Morality, Modern Responsibility and Green Innovation

Traditional morality encompasses the moral principles and normative systems that have been passed down through generations within specific regions, societies, or groups, often shaped by local religion, culture, and customs [26]. This moral framework is typically geographically defined, with each region promoting distinct moral values rooted in its traditions [27,28]. Traditional moral cultures often emphasize maintaining internal group harmony and reinforcing the continuity of corresponding formal institutions [60]. As such, they tend to discourage egoism and promote altruism [61]. Traditional moral culture conveys the values of compassion and empathy through storytelling, life lessons, and role models, embedding altruistic behavior as a core element of individuals’ value systems. Over time, individuals internalize these values, which drives them to act altruistically when encountering the suffering or needs of others [62,63]. In China, Confucianism is the predominant traditional cultural framework, with a significant historical presence and influence on social norms, shaping the standards of traditional morality. When companies adopt the altruistic principles of Confucian culture, they are more likely to consider their actions’ social and environmental impacts, moving beyond mere profit maximization. This internalized altruism encourages companies to revise business models and production processes to reduce negative environmental effects [64]. This shift often leads to proactive green innovation investments, such as developing environmentally friendly technologies, optimizing resource use, and minimizing waste. According to the empathy–altruism hypothesis, traditional moral culture motivates firms to engage in green innovation out of empathy for society and nature, leading to the following hypothesis.

H1a. 

Traditional morality promotes green innovation in enterprises.

Since the mid-20th century, the concept of corporate responsibility has evolved significantly [65]. Unlike the earlier notion that corporations primarily aim for profit maximization, the modern view emphasizes a dual focus on economic profitability and social and environmental responsibilities [66,67]. Kanungo and Conger [23] describe corporate altruism as manifested in the level of corporate social responsibility (CSR). Here, a distinction emerges between traditional and modern corporate responsibility: while traditional corporate responsibility centers on maximizing shareholder returns, modern responsibility encompasses broader commitments to environmental sustainability, social welfare, and ethical practices [30,68]. However, CSR has also been critiqued, with some, like Fleming [69], suggesting it can serve as a tool for self-interest, used by corporations to gain public approval or deflect criticism, sometimes leading to “greenwashing”. This critique implies that CSR efforts may sometimes stem more from external pressures than genuine altruistic concern.

In this study, we treat CSR as a broad concept focused on its societal benefits, regardless of the firm’s underlying intentions. From this perspective, we are less concerned with discerning whether CSR is purely altruistic or self-serving, focusing instead on its role as an expression of moral and social responsibility within corporate culture. As such, CSR can represent corporate altruism, which, even when strategically motivated, can yield positive social impacts. Graff Zivin and Small [54] propose that, under a modern perspective, companies operate as networks of stakeholder contracts, implying that social responsibility and altruism should be embedded within their activities. Modern responsibility thus embodies an altruistic philosophy, urging companies to prioritize positive contributions to society, the environment, and stakeholder well-being alongside profit maximization. Unlike traditional responsibility, which confines itself to shareholder interests, modern responsibility emphasizes accountability to a broader spectrum of stakeholders, positioning the firm as an ethical agent within society [70]. Under the influence of modern responsibility, companies recognize that engaging in altruistic practices not only fulfills social obligations but also contributes to long-term sustainability and reputation. This recognition often drives companies to invest in green technologies, optimize resource utilization, and reduce waste emissions, reflecting a proactive stance toward environmental challenges.

It is important to clarify that our discussion of modern responsibility extends beyond conventional CSR practices to encompass a broader mindset, awareness, and corporate culture that fosters societal benefit and promotes sustainable, intergenerational goals, regardless of intent [71]. By framing modern responsibility in this manner, we emphasize its potential to heighten corporate and individual awareness of societal responsibilities. According to the empathy–altruism hypothesis, modern responsibility encourages firms to be proactive in green innovation and demonstrate heightened empathy toward societal and environmental needs. This leads to the following hypothesis.

H1b. 

Modern responsibility promotes corporate green innovation.

2.3. Mediating Role of Social Trust

According to social capital theory, social trust is a core element of social capital, representing the belief that individuals or groups will act with honesty and reliability in future interactions. It forms the foundation of social relationships, facilitating cooperation, communication, and resource sharing [33,34]. Higher levels of social trust lead to smoother collaboration among individuals and organizations, more effective communication, and more frequent sharing of resources and knowledge [32]. Empirical studies have shown that social trust positively contributes to corporate innovation by reducing the risks and costs associated with collaboration and promoting the free flow of information and resources [59,72]. However, research on how social trust operates specifically within the framework of altruistic motives remains limited. Existing studies often examine social trust and altruism separately, with few integrating both within a unified framework. When motivated by altruism, individuals and firms are more inclined to share resources and information, laying a foundation for the development of social trust [35]. This trust arises not only from altruistic actions themselves but also from the honesty and reliability these actions demonstrate in social interactions.

Traditional morality and modern responsibility, as key drivers of corporate altruistic motives, play significant roles in enhancing social trust. Traditional morality shapes the values and behavioral norms of individuals and firms, promoting greater integrity and accountability, which in turn builds social trust [24,25]. Meanwhile, modern responsibility encourages firms to balance economic pursuits with social and environmental commitments, which society perceives as a marker of corporate reliability [23]. Together, traditional morality and modern responsibility foster an environment of social trust, which, in turn, is conducive to green innovation.

Social trust specifically facilitates green innovation by encouraging knowledge sharing, as trusted partners are more likely to exchange valuable information and insights related to green technologies. It also reduces perceived risks and transaction costs, making firms more willing to engage in collaborative innovation efforts. Furthermore, strong trust relationships support long-term partnerships, enabling firms to access and mobilize the resources necessary for green innovation. By cultivating a high-trust environment, firms can pursue and implement sustainable practices more efficiently and effectively. Thus, social trust is crucial in the influence of traditional morality and modern responsibility on green innovation, as it lowers cooperation risks and costs, making all parties more willing to share resources and knowledge, which further stimulates green innovation. The establishment of such trust provides firms with the social capital needed to achieve green innovation breakthroughs and advance sustainability goals. Consequently, this study proposes Hypothesis 2, positing that social trust serves as an important mediator in the relationship between traditional morality, modern responsibility, and green innovation:

H2. 

Social trust plays a mediating role in the interactions between modern responsibility and green innovation and between traditional morality and green innovation.

The research framework for this study is illustrated in Figure 1. This conceptual model demonstrates how traditional morality and modern responsibility influence green innovation, with social trust acting as a mediating variable. Traditional morality and modern responsibility are proposed to impact green innovation both directly and indirectly. Social trust serves as a mediator, suggesting that these moral orientations may enhance green innovation by fostering social trust. The directional arrows represent the hypothesized causal relationships, showing that traditional and modern altruistic cultures influence green innovation through both direct and mediated pathways. This framework thus aims to explore the dual influence of traditional and modern moral values on corporate green innovation.

3. Research Design

3.1. Data and Sample

The sample used in this paper includes Chinese A-share companies listed on the Shanghai and Shenzhen stock exchanges from 2011 to 2019. The sample period begins in 2011 because this marks the point when modern altruistic culture in China began to receive increased attention and entered a period of significant growth. The endpoint is set at 2019, as data from subsequent years may be distorted due to the impacts of the COVID-19 pandemic, which affected economic conditions, cultural dynamics, and corporate behavior. Including post-2019 data could introduce bias and compromise the reliability of this study’s conclusions. The financial data of the listed companies were obtained from the China Stock Market and Accounting Research (CSMAR) database. Corporate green innovation data were obtained from the China Research Data Service (CNRDS). Data related to modern responsibility was obtained from the Rankins (RKS) database and the Shanghai Sino-Securities Index ESG Ratings database. We performed a series of preprocessings on the dataset to ensure the robustness of the results. These steps include (1) removing samples with missing data related to the variables under study; (2) excluding firms that are excluded from special treatment (ST); (3) excluding observations with clearly abnormal financial indicators; and (4) excluding firms belonging to the financial sector. The top and bottom 1% of continuous variables were winsorized. Thus, a total of 2943 observations containing 1034 firms are used in the empirical analysis.

3.2. Measurement

3.2.1. Dependent Variables

In the existing literature, green innovation is primarily measured by firms’ innovation activities [73,74,75,76]. A common approach is to assess green innovation through the number and type of green patents applied for or granted, providing an objective measure of a firm’s investment in environmentally friendly and sustainable technologies. We used International Patent Classification (IPC) codes and keywords from the IPC Green List to identify green patents, ensuring a standardized approach to capturing innovations that contribute to sustainable development. Specifically, we measured green innovation output as the logarithm of 1 plus the number of green patents granted to a firm within a given year.

3.2.2. Independent Variables

Traditional Morality

To examine the influence of traditional morality on green innovation in the Chinese context, we chose Confucian traditional culture as a proxy for traditional morality. Confucian culture is the most influential traditional culture in China, with a long history, widespread presence, and a strong legacy of transmission. Many of its customs and practices have evolved into social norms, significantly shaping the standards of traditional morality in Chinese society [77]. Confucian culture emphasizes the inability to be selfish and the need to be altruistic in spirit and behavior [78,79]. Specifically, as Confucian temples are emblematic structures and tangible carriers of Confucian culture, serving important roles in rituals and education, we used the density of Confucian temples to represent the strength of traditional moral values in the regions where firms are located [80,81], which is measured by taking the logarithm of the number of Confucian temples within a 100 KM radius of the firm’s location. In addition, the Confucian academies is also a classic building of Confucian culture. In the robustness test, we used the strength of traditional morality [82,83] measured by taking the logarithm of the number of Confucian academies within a 100 km radius of the firm’s location.

Modern Responsibility

In the existing literature, scholars examining firms’ CSR awareness and attitudes mainly use CSR rating scores and ESG rating scores as measurement tools [84,85,86]. These ratings assess a company’s performance in environmental protection, labor rights, social welfare, and overall social responsibility, reflecting its commitment to and awareness of modern responsibility. We used CSR rating scores to measure a firm’s awareness of modern responsibility. For robustness tests, we used ESG rating scores as an alternative measure of a firm’s awareness and commitment to modern responsibility.

3.2.3. Mediating Variables

To explore the mediating role of social trust, this study constructs an indicator for measuring social trust. This indicator broadly describes the relationships between a company and its suppliers, customers, employees, government, and institutional investors. Specifically, this index broadly captures the trust-based relationships between the company and its key stakeholders, including customers, suppliers, employees, the government, and institutional investors. Specifically, customer concentration measures the trust between customers and the company. High customer concentration indicates that certain customers purchase a large volume of products or services from the company, reflecting a significant level of trust in the company’s offerings. Such a high concentration is often associated with intertemporal transactions and proprietary investments, both of which rely fundamentally on trust. Similarly, this study employs supplier concentration to assess trust between suppliers and the company. Supplier concentration signifies resource commitment and priority allocation toward the company, often accompanied by extensive information sharing and deeper cooperation. Additionally, employee education level serves as a proxy for trust between employees and the company, as highly educated employees generally have greater employment options and choose to work for a company they trust. Government subsidies quantify the trust between the government and the company, as governments are more inclined to grant subsidies to trusted enterprises to ensure that funds are applied toward specific societal goals, such as environmental protection, innovation, or job creation. Finally, institutional ownership serves as an indicator of trust between institutional investors and the company. When institutional investors trust a company’s future prospects and anticipate a favorable return, they purchase the company’s shares, making ownership concentration a reflection of their trust. To calculate this social trust index, we first determine the annual mean value for each relevant dimension within the industry in which the company operates. If the company’s data exceed the industry mean, it is assigned a value of 1; if it falls below, it is assigned a value of 0. These scores are then summed up and divided by 5 to standardize the results. A higher score indicates stronger and more robust trust relationships between the company and its societal stakeholders.

3.2.4. Control Variables

We include the following variables in our analysis to control for the effects of factors that may explain our results. First, we control for some basic characteristics of the firm: size [87,88], measured as the logarithm of the total assets; and firm age [89], measured as the logarithm of the number of years the firm has been in existence. Second, we control for some financial indicators of the firm: book-to-market ratio [90] measured as book value/market value return on assets; return on assets [91], measured as net profit/total assets; and operating profit margin [92], measured as operating profit/revenue. Finally, we control for a number of corporate governance variables: largest shareholder ownership [93,94], measured as the number of shares held by the largest shareholder/total number of shares in the firm; equity balance [95], measured as the ratio of the sum of the shareholdings of the second through fifth largest shareholders to the shareholding of the first largest shareholder; and whether or not the CEO also serves as the chairman of the board of directors [96], which takes the value of 1 when the CEO assumes the chairmanship position and otherwise takes the value 0.

3.3. Analytical Models and Techniques

To test our hypotheses, we employed an ordinary least squares (OLS) estimation model, which is well suited for examining linear relationships between continuous variables. Specifically, we analyzed the effects of traditional morality on green innovation as well as the impact of the modern concept of responsibility on green innovation. Our regression model is as follows:

$${Greeninnovation}_{it}={\alpha }_0+{{\alpha }_{1}Traditionalmorality}_{it}+\sum {Control}_{it}+Ind+Year+{\epsilon }_{it}$$

(1)

$${Greeninnovation}_{it}={\beta }_0+{{\beta }_{1}Modernresponsibilities}_{it}+\sum {Control}_{it}+Ind+Year+{\epsilon }_{it}$$

(2)

where Ind and Year represent industry fixed effects and year fixed effects, individually; ${\epsilon }_{it}$ is the residual term. To mitigate potential heteroscedasticity that may affect regression results, the model employs robust standard errors. The data analysis software used in this paper is Stata 17.0.

4. Results

4.1. Benchmark Regression Results

Table 1. Descriptive statistics.

Variable	min	p25	Mean	Median	p75	Max	sd
Green innovation	0.000	0.693	1.188	1.099	1.609	3.912	0.858
Traditional morality	0.000	1.386	1.830	1.946	2.303	2.944	0.641
Modern responsibility	21.274	34.41	43.741	41.096	51.403	80.151	12.598
Company assets	20.145	21.475	22.461	22.252	23.294	26.415	1.339
Largest shareholder	0.084	0.232	0.350	0.332	0.450	0.750	0.150
Firm age	1.946	2.639	2.836	2.890	3.045	3.526	0.305
Return on assets	−0.142	0.017	0.043	0.040	0.069	0.188	0.049
Operating profit margin	−0.407	0.028	0.084	0.078	0.140	0.402	0.116
Shareholding balance	0.029	0.255	0.735	0.571	1.029	2.843	0.614
Book-to-market ratio	0.149	0.452	0.633	0.632	0.802	1.158	0.234
CEO’s dual position	0.000	0.000	0.265	0.000	1.000	1.000	0.441

presents the descriptive statistics of the main variables. The minimum value for green innovation is 0, with a mean of 1.188 and a standard deviation of 0.858. The maximum value reaches 3.912, indicating that firms with the highest investment in green innovation achieved up to 49 green patents in a single year. Approximately 25% of firms have green innovation values below 0.693, while another 25% exceed 1.609. The interquartile range (0.916) is 77.10% of the mean, indicating substantial variation in green innovation levels among firms, with some showing a lack of green innovation altogether and others displaying significant investment in this area. Traditional morality and modern responsibility fluctuate between 0–2.944 and 21.274–80.151, respectively, with means of 1.83 and 43.741 and standard deviations of 0.641 and 12.598. This suggests notable differences in both traditional morality and modern responsibility levels across firms.

Table 2. Matrix of correlation coefficients.

	Green Innovation	Traditional Morality	Modern Responsibility	Company Assets	Largest Shareholder	Firm Age	Return on Assets	Operating Profit Margin	Shareholding Balance	Book-to-Market Ratio	CEO’s Dual Position
Green innovation	1
Traditional morality	0.044	1
Modern responsibility	0.132 ***	−0.019	1
Company assets	0.327 ***	0.023	0.433 ***	1
Largest shareholder	0.017	0.151 ***	0.209 ***	0.268 ***	1
Firm age	0.003	−0.052	0.098 ***	0.084 **	−0.279 ***	1
Return on assets	−0.016	−0.001	0.022	−0.075 **	0.045	−0.046	1
Operating profit margin	−0.049	0.007	0.047	0.007	0.062 *	−0.032	0.753 ***	1
Shareholding balance	0.019	−0.091 ***	0.033	−0.054	−0.686 ***	0.171 ***	0.026	0.028	1
Book-to-market ratio	0.148 ***	−0.041	0.194 ***	0.570 ***	0.171 ***	0.150 ***	−0.438 ***	−0.263 ***	−0.066 *	1
CEO’s dual position	0.029	−0.025	−0.092 ***	−0.110 ***	−0.166 ***	0.031	0.171 ***	0.123 ***	0.146 ***	−0.164 ***	1

Note(s): This table shows the results of the Pearson correlation coefficients for the main variables. *, **, and *** represent the significance level of 10%, 5% and 1%.

shows the table of correlation coefficients. The correlation coefficient between modern responsibility and green innovation is 0.132, significant at the 1% level, while the correlation between traditional morality and green innovation is 0.044, which is not significant. This suggests an initial indication of a positive influence of both traditional morality and modern responsibility on green innovation; however, the specific effects and causal relationships require further investigation. Additionally, as all correlation coefficients between variables are below 0.8, there is no preliminary indication of multicollinearity in the model. To further ensure that the model is free from multicollinearity, we conducted a VIF (variance inflation factor) test. The results indicate that the VIF values for all variables in Model (1) and Model (2) are below 10, with average VIF values of 2.11 and 2.57, respectively. This suggests that multicollinearity is not a concern in these models.

The results in

Table 3. Baseline regression analysis.

	(1)	(2)	(3)	(4)
Variable	Green Innovation	Green Innovation	Green Innovation	Green Innovation
Traditional morality	0.040 *	0.049 **
	(1.719)	(2.074)
Modern responsibility			0.017 ***	0.006 **
			(7.015)	(2.409)
Company assets		0.197 ***		0.329 ***
		(13.386)		(10.521)
Largest shareholder		−0.022		−0.852 ***
		(−0.149)		(−3.323)
Firm age		−0.312 ***		−0.320 ***
		(−5.788)		(−2.863)
Return on assets		1.758 ***		−1.375
		(3.032)		(−1.477)
Operating profit margin		−0.723 ***		0.156
		(−3.035)		(0.348)
Shareholding balance		−0.011		−0.149 **
		(−0.324)		(−2.523)
Book-to-market ratio		0.084		−0.272 *
		(0.917)		(−1.651)
CEO’s dual position		0.027		0.167 **
		(0.780)		(2.448)
Constant	0.783 ***	−2.925 ***	0.141	−5.561 ***
	(3.802)	(−7.113)	(0.668)	(−7.643)
Industry	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes
N	2943	2943	1339	1339
R2	0.045	0.133	0.222	0.320

Note(s): *, **, and *** represent the significance level of 10%, 5%, and 1%. t-values in parentheses, using robust standard errors.

show the results of testing the relationship between traditional morality and modern responsibility and firms’ green innovation. H1 and H2 predicted that traditional morality and modern responsibility promoted firms’ green innovation, respectively. Column (2) from Table 3 shows that for green innovation, the coefficient of traditional morality is 0.049, which is significant at the 5% level. Column (4) in Table 3 shows that for green innovation, the coefficient of modern responsibility is 0.006, which is significant at the 5% level. To interpret the economic significance of the regression coefficients, we use columns (2) and (4), which control for all variables as well as industry and time-fixed effects, as examples. A one-standard deviation increase in traditional morality leads to a 0.031 increase in firms’ green innovation, calculated as 0.049 × 0.641, which represents approximately 2.61% of the mean green innovation level (0.031/1.188). Similarly, a one-standard deviation increase in modern responsibility results in a 0.076 increase in green innovation (0.006 × 12.598), accounting for about 6.40% of the mean (0.076/1.188). Given the importance of green innovation patents, we consider the regression coefficients of traditional morality and modern responsibility to hold substantial economic significance. Therefore, H1a and H1b are supported.

4.2. Robustness Tests

In order to ensure the reliability of the research findings, the following robustness tests were conducted. First, the logarithm of the number of Confucian academies within a 100 km radius of the company’s location was used as a proxy variable for traditional morality. The results of the re-test are shown in column (1) in

Table 4. Robustness test.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation
Traditional morality	0.111 ***		0.063 **		0.048*		0.049 **
	(4.188)		(2.348)		(1.701)		(2.065)
Modern responsibility		0.028 ***		0.008 ***		0.006 **		0.006 **
		(2.838)		(3.197)		(2.455)		(2.369)
GDP per capita			−0.491 **	0.007 ***
			(−2.100)	(2.705)
Education per capita			0.018	0.029
			(0.273)	(0.072)
Population growth rate			0.015 *	−0.096
			(1.879)	(−0.875)
Population density			−0.028	−0.184 ***
			(−0.910)	(−3.779)
Controls	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Province	No	No	No	No	Yes	Yes	No	No
Industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year-industry	No	No	No	No	No	No	Yes	Yes
N	3016	6694	2624	1195	2943	1339	2943	1339
R2	0.170	0.142	0.151	0.363	0.158	0.339	0.118	0.275

Note(s): *, **, and *** represent the significance level of 10%, 5%, and 1%. t-values in parentheses, using robust standard errors.

. Second, ESG ratings are also often used by scholars to measure a firm’s modern responsibility, so we performed a re-test using ESG ratings data. The re-test results are shown in column (2) in Table 4. Third, to further control for regional factors and reduce the potential for spurious correlations arising from differences in economic development, education levels, and population distribution, we included the logarithmic GDP per capita, logarithmic years of education per capita, and the natural growth rate of resident populations for each province, as well as population density at the city level where each firm is located, in our regression analysis. The regression results are shown in columns (3) and (4) in Table 4. Finally, to reduce the possibility of omitted variables interfering with the results of the study, this paper further controls for fixed effects by adding province fixed effects (column (5) and column (6)) and time-industry interaction fixed effects (column (7) and column (8)) in the baseline model to conduct the test, respectively. As a result of these re-tests, we find no substantial changes in our findings. The robustness test is passed.

4.3. Mechanism Test Results

This study examines the mediating role of social trust in the relationship between traditional morality, modern responsibility, and green innovation using the three-step method [96]. According to the results shown in columns (2) and (5) of

Table 5. Mechanisms analysis.

	(1)	(2)	(3)	(4)	(5)	(6)
Variable	Green Innovation	Social Trusts	Green Innovation	Green Innovation	Social Trusts	Green Innovation
Traditional morality	0.049 **	0.012 **	0.048 **
	(2.151)	(2.035)	(2.087)
Modern responsibility				0.006 **	0.001 **	0.005 **
				(2.409)	(2.072)	(2.314)
Social trusts			0.117 *			0.205 *
			(1.650)			(1.753)
Controls	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes
N	2943	2943	2943	1339	1339	1339
R2	0.133	0.126	0.133	0.320	0.223	0.321

Note(s): * and ** represent the significance level of 10% and 5%. t-values in parentheses, using robust standard errors.

, traditional morality and modern responsibility are both significantly and positively associated with social trust, and social trust is, in turn, significantly and positively associated with green innovation. Furthermore, the regression coefficients for traditional morality and modern responsibility decrease significantly after social trust is included in the model. These findings suggest that social trust partially mediates the relationship between traditional morality, modern responsibility, and green innovation. While some studies propose that green innovation may, in turn, foster social trust [97,98], our analysis confirms that social trust primarily serves as a mediator rather than being influenced by a feedback loop. This potential feedback does not alter our main conclusions. Therefore, Hypothesis 2 is supported.

4.4. Heterogeneity Test Results

To examine the heterogeneous effects of traditional morality and modern responsibility on corporate green innovation, we consider factors such as marketization and the soundness of legal systems. First, marketization measures the complexity of the economic system and market operations in the region where a company operates [99,100,101]. Following previous research, this study uses the marketization score from the provincial-level NERI Index of Marketization to measure the level of marketization. The provincial-level NERI Index of Marketization is a relatively authoritative report that assesses China’s market environment, the development of legal systems, and the growth of the non-state economy [102,103]. Provinces are categorized into high and low marketization groups based on their marketization levels relative to the national average. Second, the robustness of the legal system provides a comprehensive evaluation of a region’s legal institutions, encompassing completeness, transparency, enforcement, judicial independence, credibility, and stability of legal norms [104]. Drawing on previous research, this study uses the scores for intermediary organizations and legal systems from the provincial-level NERI Index of Marketization report to measure legal soundness [105]. Provinces are categorized into high and low legal soundness groups based on their legal development levels compared to the average level across all provinces.

Table 6. Heterogeneity analysis.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Low Marketization	High Marketization	Low Marketization	High Marketization	Low Legal Soundness	High Legal Soundness	Low Legal Soundness	High Legal Soundness
Variable	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation	Green Innovation
Traditional morality	0.096 ***	−0.003			0.079 ***	0.008
	(3.128)	(−0.087)			(2.708)	(0.219)
Modern responsibility			0.004	0.009 ***			0.003	0.010 ***
			(1.399)	(2.616)			(0.936)	(2.668)
Controls	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
N	1059	1884	598	741	1221	1722	691	648
R2	0.174	0.114	0.366	0.325	0.181	0.106	0.338	0.355

Note(s): *** represent the significance level of 1%. t-values in parentheses, using robust standard errors.

presents the results of the heterogeneity analysis. The findings indicate that in regions with lower levels of marketization and legal soundness, the relationship between traditional morality and corporate green innovation is more pronounced. Conversely, in regions with higher levels of marketization and legal soundness, the impact of modern responsibility on corporate green innovation is more significant. According to institutional theory [106], in regions with lower levels of marketization and less developed legal systems, formal institutional constraints are relatively weak, leading to a greater reliance on traditional morality to regulate behavior and coordinate social interactions. In such contexts, traditional morality exerts a stronger influence. Conversely, in regions with higher marketization and more developed legal systems, formal regulations are more robust, placing greater emphasis on and encouraging modern altruistic awareness. As a result, the influence of traditional morality is diminished, while the role of modern altruistic responsibility becomes more prominent.

5. Discussion and Conclusions

Drawing on the empathy–altruism hypothesis and social capital theory, this paper investigates the effects of traditional morality and modern responsibility on green innovation, using a sample of A-share companies listed on the Shanghai and Shenzhen stock exchanges in China from 2011 to 2019. The findings demonstrate that both traditional morality and modern responsibility, as key drivers of corporate altruistic motivation, significantly contribute to green innovation. These results highlight the influence of informal awareness and cultural values on corporate innovation strategies, addressing a gap in previous research on innovation driven by altruistic purposes. Additionally, the study reveals that social trust mediates the relationship between traditional morality, modern responsibility, and green innovation. This indicates that altruistic motives and behaviors contribute to the accumulation of social capital in the form of trust, which in turn provides essential resources, knowledge, and opportunities for cooperation in green innovation.

This study also examines how market and legal environments influence these relationships. The findings show that modern responsibility has a more substantial impact on green innovation in regions with higher marketization and stronger legal systems, whereas traditional morality is more influential in regions with lower marketization and less developed legal frameworks. This suggests that traditional morality and modern responsibility play distinct roles depending on the stage of economic development, with modern responsibility acting as a contemporary expression of traditional morality in China and reflecting a continuation of corporate altruistic culture [31].

These findings have practical implications for addressing pressing global challenges, such as climate change and resource depletion. Given the vital role that companies play in driving sustainable development, this study provides evidence that ethical and altruistic motivations can serve as powerful drivers of green innovation. Companies that prioritize ethical values and build long-term stakeholder trust are better positioned to innovate in ways that benefit both their bottom line and societal well-being. In a world where environmental sustainability increasingly determines business success, understanding the role of ethics in innovation offers actionable insights for companies aligning their strategies with global sustainable development goals.

5.1. Theoretical Contribution

This paper makes some important theoretical contributions to the green innovation literature. Although a large body of previous literature has discussed and explored the drivers of green innovation [12,42,43,44,107], the analysis from the purposefulness of green innovation is limited. Previous studies have mainly explored green innovation in firms based on self-interested purposefulness, while insufficient attention has been paid to altruistic purposefulness [45]. This paper addresses this gap by incorporating altruistic motives and provides a theoretical basis for understanding green innovation from an altruistic perspective.

Additionally, this paper enriches the green innovation literature by creating a unified framework that integrates altruism, trust, and green innovation. Based on the empathy–altruism hypothesis and social capital theory, this framework offers theoretical insights into green innovation behaviors driven by altruistic motives.

5.2. Practical Contribution

The findings underscore the critical importance of fostering a culture of trust and ethical responsibility in business. Companies that build strong, trust-based relationships with customers, suppliers, and employees are more likely to succeed in green innovation. This approach not only enhances corporate reputation but also bolsters long-term resilience. Practically, businesses should invest in ethical leadership and corporate social responsibility, recognizing that these intangible assets contribute directly to both innovation and sustainability.

In an era where economic growth often comes at the expense of the environment, this study highlights the broader societal implications. Moral values and social trust serve as foundational elements for sustainable development. Encouraging ethical behavior and fostering a culture of responsibility across all sectors is essential for achieving long-term sustainability. Promoting high moral standards in corporate practices can yield both economic and environmental benefits, advancing collective well-being.

To drive sustainable transformation, companies must integrate altruistic values into their corporate culture, balancing self-interest with traditional ethics and modern responsibility. This transformation requires businesses to consider not only their own goals but also their role in society, using ethical principles to guide strategic decisions. Social groups play a vital role in supporting companies that embrace altruism, as these motivations take time to yield tangible outcomes. Long-term trust and support from investors, government policies promoting corporate altruism, and collaborative opportunities from other social entities are crucial for these companies’ success.

5.3. Limitations and Future Research

This study has certain limitations. While we believe our findings are generalizable, it should be noted that traditional morality varies geographically. In China, Confucian moral culture is a typical form of traditional morality; however, different regions and ethnic groups may have distinct cultural and moral standards. Additionally, as moral values evolve over time, using the density of Confucian temples and academies as a proxy may have limitations in fully capturing these variations. Future research should consider diverse samples from other countries and regions for broader insights. Similarly, CSR and ESG ratings used to measure modern responsibility may not fully capture a company’s commitment to sustainable development. These ratings can sometimes provide an incomplete picture, be influenced by regional differences, and overly emphasize short-term performance. Future studies should explore more comprehensive measures to investigate the relationship between modern responsibility and corporate green innovation. Moreover, the empathy–altruism hypothesis employed in this study primarily addresses emotional and ethical drivers at the individual level. However, due to the difficulty in obtaining detailed individual-level data, it is not feasible to use a multilevel model. Therefore, by conceptualizing the firm as an entity whose actions are guided by the ethical and moral principles of key decision-makers (e.g., executives), we extend the empathy–altruism hypothesis to the organizational level. This approach enables us to analyze the research question using firm- and regional-level data through an OLS model.

For future research, we will strive to collect individual-level data to enable the use of a multilevel model for examining the effects of traditional morality and modern responsibility on corporate green innovation, thereby achieving more comprehensive and robust conclusions. Additionally, by categorizing regions based on the levels of marketization and legal institutional development, this study reveals that traditional morality and modern responsibility play different roles across various stages of economic development. However, economic development stages can be assessed from multiple perspectives, which prompts us to further explore alternative measures such as industrial structure and technological level. This approach would allow for a more nuanced analysis of the impact of traditional morality and modern responsibility on green innovation across different economic contexts.