Document Type : Research Paper
Authors
1
Department of Accounting, Payame Noor, University, Tehran, Iran
2
Department of Accounting, Payame Noor University, Tehran, Iran.
3
Assistant Professor of Accounting, payame Noor University, Tehran, Iran. Email:
4
MSc in accounting, Department of Accounting, Azad University, Borujen, Iran.
10.22111/innoeco.2025.50121.1128
Abstract
Among the problems that human societies face today due to industrialization are environmental issues. Sustainable development approaches are considered an important solution for stakeholders, and most companies undertake environmental, social, and governance (ESG) activities to achieve sustainable development. This guarantees the continuation of their activities in competitive markets. To fulfill their social responsibility, companies must invest a portion of their resources to mitigate environmental problems. Environmental investment in companies is a result of various factors such as legal requirements, reputation gain, accountability, and competitors' performance. The goal of the present study is to investigate the moderating role of innovation capability in the effect of political connections on the environmental investment of companies listed on the Tehran Stock Exchange. The data collected from 170 listed companies during the period of 2015 to 2022 (1394 to 1401 in the Persian calendar) were tested using the binary logit regression method. The research is applied in terms of objective, ex-post facto in nature, and utilizes descriptive-correlational methods for data analysis. The findings indicate that political connections have a positive and significant effect on environmental investment. Furthermore, the company's innovation capability weakens the positive effect of political connections on the sample companies' environmental investment.Based on the research findings, it can be concluded that political connections increase the motivation for social and environmental responsibility activities. Also, creating and improving innovation capability within the company's investments acts as a preventive tool, leading to a reduction in environmental costs and the enhancement of corporate competitiveness.
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