From compliance disclosure to innovative action: A study on the transmission mechanism of climate risk disclosure from the dual legitimacy perspective

Grounded in dual-legitimacy theory, this study leverages a comprehensive sample of Chinese A-share listed firms to empirically investigate the impact and mechanisms of corporate climate-risk disclosure (CRD) on green innovation. We find that CRD significantly enhances green innovation, furnishing robust emerging-market validation for the Porter hypothesis. Mechanism tests uncover dual legitimacy pathways: CRD bolsters social legitimacy by amplifying media oversight and societal ethical pressures, while fortifying market legitimacy by mitigating managerial short-termism and reorienting incentives toward long-term sustainability. These channels synergistically propel substantive innovation investments. Heterogeneity analyses reveal amplified effects in digitally advanced firms and those led by CEOs with overseas experience, underscoring the moderating influence of organizational absorptive capacity and globally attuned managerial cognition. Theoretically, we advance dual-legitimacy theory by operationalizing its macro constructs into verifiable micro-mechanisms—via explicit transmission paths and boundary conditions—illuminating how firms strategically reconcile institutional pressures to yield innovation outcomes. Practically, our findings inform incentive-compatible disclosure policies, internal governance reforms, and market resource allocation to accelerate green transformations in emerging economies.