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How does environmentally induced R&D affect carbon productivity? A government support perspective

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  • Zhao, Shikuan
  • Cao, Yuequn
  • Hunjra, Ahmed Imran
  • Tan, Yan

Abstract

Environmentally induced R&D (ER&D) has been positioned as an essential factor in emission reduction and total factor carbon productivity (TFCP) improvement; however, how government support moderates ER&D's impact on TFCP is unclear. Using 30 Chinese provinces' panel data for 1998–2020, this paper applies the systemic generalized method of moments (SYS-GMM), dynamic threshold, and spatial Durbin models to explore ER&D's impact on TFCP under various types of government support. The results show a “U-shaped” ER&D-TFCP relationship. All types of government support can positively moderate ER&D's impact on regional TFCP. With government support as the threshold variable, ER&D's impact on green total factor productivity gradually increases. Moreover, ER&D and government support show a spatial spillover effect on TFCP. This paper offers policy implications about ER&D investment and TFCP improvement for China and other developing countries.

Suggested Citation

  • Zhao, Shikuan & Cao, Yuequn & Hunjra, Ahmed Imran & Tan, Yan, 2023. "How does environmentally induced R&D affect carbon productivity? A government support perspective," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 942-961.
    • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:942-961
    DOI: 10.1016/j.iref.2023.07.022
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