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Dual-Credit Policy of New Energy Automobiles in China: Corporate Innovation Capability

Author

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  • Joston Gary

    (DEGEIT-Department of Economics, Management, Industrial Engineering and Tourism, University of Aveiro, 3810-193 Aveiro, Portugal)

  • Pengfei Zhao

    (Center for Career Capability Development, Chongqing Institute of Engineering, Chongqing 400056, China
    School of Economics and Business, University of Navarra, 31006 Pamplona, Spain)

  • Zhihao Bao

    (School of Economics and Business, University of Navarra, 31006 Pamplona, Spain)

Abstract

This study investigates the impact of China’s Dual-Credit Policy on innovation capability in the new energy vehicle (NEV) industry using a difference-in-differences approach with dynamic panel data from 2013 to 2022. We employ multiple innovation measures, including patent counts, valid invention patents, and patent grant rates. Our findings reveal that the policy has a positive and significant effect on NEV innovation, partially mediated by R&D investment. Using GMM estimation to address endogeneity, we find the policy effect varies across subgroups based on location, ESG rating, and ownership type. Dynamic effect analysis shows the policy’s impact intensifies over time. Threshold effect analysis identifies a critical policy intensity level beyond which innovation effects are amplified. Our results have implications for policymakers in designing effective innovation incentives and for firms in strategically responding to regulatory changes in the NEV sector.

Suggested Citation

  • Joston Gary & Pengfei Zhao & Zhihao Bao, 2024. "Dual-Credit Policy of New Energy Automobiles in China: Corporate Innovation Capability," Sustainability, MDPI, vol. 16(17), pages 1-31, August.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:17:p:7504-:d:1467270
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    References listed on IDEAS

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    1. Benn Lawson & Danny Samson, 2001. "Developing Innovation Capability In Organisations: A Dynamic Capabilities Approach," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 377-400.
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