When Financial Analysts Become Climate Actors: How Information Networks Shape Corporate Green Innovation

Climate-sensitive firms face mounting pressure to innovate environmentally, yet the role of market-based information channels remains underexplored. This study examines whether firms positioned centrally within analyst climate coverage networks exhibit enhanced green innovation. Using panel data from 12,101 firm-years across China's eight key emission sectors between 2014 and 2024, we find that firms with more central network positions produce more green patents. This relationship operates through three pathways. Firms reallocate resources from administrative expenses toward environmental projects, experience improved information transparency that reduces innovation uncertainty, and gain better access to financing for technology investments. The findings remain robust across alternative specifications and identification strategies addressing potential endogeneity. Our results indicate that information networks in climate-sensitive sectors can serve as market-based governance tools that work alongside traditional regulations to advance low-carbon transitions and sustainable development goals.