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Carbon emissions and firm innovation

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  • Huang, Zhi-xiong
  • Yang, Xiandong

Abstract

The economic consequences of carbon reduction policies have been well documented in the literature. However, it remains unclear whether such policies can promote firm innovation. In this study, we examine the effects of carbon emission reduction on firm innovation in China with reference to the carbon intensity constraint policy (CICP) issued in 2009 to reduce greenhouse gas emissions. We design a natural experiment to investigate the effect of the CICP on firm innovation, and the results show that the introduction of the CICP significantly reduced firm innovation. Overall, this study offers clear practical implications for regulators concerned with the issues of firm innovation and environmental protection.

Suggested Citation

  • Huang, Zhi-xiong & Yang, Xiandong, 2021. "Carbon emissions and firm innovation," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 503-513.
    • Handle: RePEc:eee:ecanpo:v:69:y:2021:i:c:p:503-513
    DOI: 10.1016/j.eap.2021.01.009
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    Cited by:

    1. Zhou, Fengxiu & Wang, Xiaoyu, 2022. "The carbon emissions trading scheme and green technology innovation in China: A new structural economics perspective," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 365-381.
    2. Yang, Zhenbing & Zhao, Ziyi & Shao, Shuai & Yang, Lili, 2023. "Carbon regulation and enterprise investment: Evidence from China," Energy Economics, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    Carbon intensity constraint policy; Firm innovation; China;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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