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How Does Climate Policy Uncertainty Affect Green Innovation? Evidence from China
Ke Mao1,2, Junxin Huang3
1Business School, Xiangtan University, Xiangtan 411105, China.
International Journal of Environmental Research and Public Health
|December 11, 2022
Summary
Climate policy uncertainty (CPU) significantly hinders enterprise green innovation (GI) by worsening financing constraints. Government subsidies can help, but non-state-owned firms are disproportionately affected.
Area of Science:
- Environmental Economics
- Corporate Sustainability
- Climate Policy Analysis
Background:
- Governments implement climate policies to address climate change.
- Climate policy uncertainty (CPU) presents challenges for the business sector.
- The impact of CPU on enterprise green innovation (GI) requires investigation.
Purpose of the Study:
- To investigate the impact of CPU on enterprise GI.
- To develop a China CPU index.
- To analyze the mechanisms and heterogeneity of CPU's effect on GI.
Main Methods:
- Creation of the China CPU index.
- Utilizing panel data from Chinese A-share listed companies (2010-2021).
- Employing fixed effects, mediating effects, and moderating effects models.
Main Results:
- CPU significantly suppresses enterprise GI.
- CPU inhibits GI by exacerbating enterprise financing constraints.
- Government subsidies can mitigate the negative impact of CPU on GI.
- The negative impact of CPU on GI is heterogeneous, affecting non-state-owned enterprises more.
Conclusions:
- CPU poses a significant barrier to enterprise green innovation in China.
- Addressing financing constraints and leveraging government subsidies are crucial for mitigating CPU's impact.
- Policy interventions should consider the heterogeneous effects on different enterprise types.
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