The Influence of Board Network on Green Innovation Behavior in the Context of Water Risk: Empirical Evidence from High Water- consuming Enterprises

Abstract

Against the backdrop of escalating water resource crises, water-related risks have emerged as one of the greatest threats facing society at large. How enterprises, particularly high water-consuming ones, cope with water risk has become a focal point of attention. Board networks, which provide as an unofficial governance framework for businesses to get knowledge and resources, are essential for encouraging risk-taking and green innovation among high water-consuming enterprises. Using a sample of 316 high water-consuming companies listed on the Shanghai and Shenzhen stock exchanges from 2010 to 2022, this study empirically examines the impact of board networks on corporate green innovation, exploring the mediating role of risk-taking and the moderating effect of environmental uncertainty. Results indicate a positive relationship between both board network centrality and structural hole richness and green innovation, with structural hole richness showing a more pronounced effect. Risk-taking partially mediates the influence of board networks on green innovation. Regarding the moderating effect of environmental uncertainty, environmental dynamism and complexity intensify the positive impact of board networks on green innovation. This study provides theoretical support and practical evidence for high water-consuming enterprises to improve board selection criteria and facilitate access to resources and reduce agency costs to drive green innovation.