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Climate policy uncertainty and corporate green innovation: Evidence from Chinese A-share listed industrial corporations

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  • Bai, Dongbei
  • Du, Lizhao
  • Xu, Yang
  • Abbas, Shujaat

Abstract

Confronted with the increasingly severe climate change, frequent changes in Chinese government decrees have enhanced climate policy uncertainty. This study explores the relationship between climate policy uncertainty (CPU) and corporate green innovation (GI) using data from A-share industrial companies listed in China's Shanghai and Shenzhen markets from 2011 to 2020. Results show that climate policy uncertainty positively contributes to firms' green innovation. Secondly, there is significant heterogeneity in the effect of uncertainty in climate policy on firms' green innovation, with a more substantial effect on non-state enterprises, energy-providing industries, and technology-intensive firms. Furthermore, climate policy uncertainty can increase regional environmental regulations and the level of R&D investment by firms, leading to an increase in the level of green innovation by firms. Reducing differential policy treatment by governments and increasing R&D investment by firms are, therefore, important ways to enhance green innovation and improve the competitiveness of enterprises.

Suggested Citation

  • Bai, Dongbei & Du, Lizhao & Xu, Yang & Abbas, Shujaat, 2023. "Climate policy uncertainty and corporate green innovation: Evidence from Chinese A-share listed industrial corporations," Energy Economics, Elsevier, vol. 127(PB).
    • Handle: RePEc:eee:eneeco:v:127:y:2023:i:pb:s0140988323005182
    DOI: 10.1016/j.eneco.2023.107020
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