Why proximity to regional innovation centers matters: A new perspective on green innovation bubbles

While regional innovation centers (RICs) can encourage corporate green innovation, firms may opportunistically exaggerate their green innovation activities under RICs’ spatial influence, thereby engendering green innovation bubbles. We theorize that geographic proximity to RICs shapes these bubbles by influencing firms’ capability and motivation to exaggerate green outputs. The results indicate that (1) proximity to RICs exhibits an inverted U-shaped relationship with corporate green innovation bubbles; (2) green strategic orientation (GSO) positively moderates this relationship, steepening the inverted U-shaped curve among firms with higher GSO; and (3) political connections shift the peak of the curve, with bubble formation peaking and declining at greater geographic distances. Overall, this study enhances our understanding of geographic influences on green innovation from a strategic response perspective. Moreover, it highlights organizational heterogeneity’s role in shaping how firms interpret and respond to geographic influences.