Does Climate Risk Attention Sensitivity Affect Corporate Green Innovation? Evidence From China

Public concern about climate risk is growing, yet companies respond to these concerns differently, exhibiting varying degrees of sensitivity. We measure corporate climate risk attention sensitivity by analysing the relationship between stock excess returns and public climate concerns. Our findings indicate that greater sensitivity to climate risk concerns promotes both the quantity and quality of firms' green innovation. Mechanism analysis suggests that this positive effect is primarily driven by increased environmental investment. Cross‐sectional analysis further reveals that this effect is more pronounced in firms with negative climate risk concern sensitivity, those operating in manufacturing industries, and firms subject to stringent regional environmental enforcement.