Marlene Herz: Losing or gaining the edge: How political connections shape green innovation

Marlene Herz (Kühne Logistics University) with Na Zou (University of Bath)

What motivates firms to pursue green innovation? We argue that corporate political connections embed firms in partisan networks that shape strategic attention and legitimacy around the green transition, altering both the opportunities and pressures firms face. Using panel data on U.S. publicly listed firms (2001–2022) and a difference-in-differences design exploiting plausibly exogenous resignations of politically connected directors, we find asymmetric effects by ideology: losing liberal ties does not in general reduce green innovation, whereas losing conservative ties increases green innovation overall, especially in climate mitigation technologies. These effects depend on local politics: the decline after severing liberal ties is stronger in Republican-governed states, while the increase after losing conservative ties is stronger in Democratic-governed states. Mechanism evidence is consistent with distinct pathways: losing conservative ties is followed by higher environmental enforcement intensity (buffering), whereas losing liberal ties is followed by fewer green procurement contracts (binding). Overall, we show how the ideological orientation of political ties and local political context jointly shape firms’ green innovation strategies.

Marlene Herz is a Post-doctoral Researcher at Kühne Logistics University (KLU). She earned her PhD in Quantitative Economics from Goethe University Frankfurt in 2026, graduating summa cum laude. She previously completed a Master's in International Political Economy at the London School of Economics and Political Science (LSE) and a Bachelor's in Economics at the University of Cologne.

Her research lies at the intersection of innovation strategy and innovation management and follows two main streams. The first examines how external stakeholders, particularly shareholders, shape the scale and direction of corporate innovation. The second investigates how firms generate and evaluate ideas, both from within the organization and from external sources.

Marlene complements her academic work with practical experience in public sector consulting at PricewaterhouseCoopers (PwC) and at the Competence Center for Economic Policy and Private Sector Development at GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit).