Paving the Pathways Toward Sustainable Innovation: Underperformance Duration and Corporate Innovation Willingness

Growth enterprise markets (GEM) firms aiming to achieve sustainable innovation still face underperformance due to uncertainty in the business environment. In fact, as underperformance duration increases, many GEM firms still show a sustained and strong willingness to innovate, which has seldom been systematically explored in existing studies. Based on corporate behavior theory and stakeholder theory and using data of Chinese listed on the A-share market from 2016 to 2021, the impact mechanism of underperformance duration on corporate innovation willingness was empirically examined by employing multiple regression analysis. The results show that the primary transmission mechanism through which the underperformance duration enhances innovation willingness is by inhibiting corporate social irresponsibility; earnings management motivation (EMM) and the degree of industry competition jointly moderate the relationship between underperformance duration and innovation willingness. This study offers practical insights for firms seeking to improve their financial performance, achieve sustainable innovation, and build sustainable development competitive advantage.