IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v57y2025i10p1124-1144.html
   My bibliography  Save this article

Do government subsidies promote enterprise green innovation? Evidence from listed companies in China

Author

Listed:
  • Shengling Zhang
  • Zihao Wu
  • Wei Dou
  • Yao Wang

Abstract

Government subsidies are essential in guiding enterprises’ transformation and development. In the face of the green transformation dilemma for businesses during the transition from old to new growth drivers, it is crucial to investigate whether government subsidies can further enhance their effectiveness. We utilize a panel dataset of Chinese listed companies from 2007 to 2021 to explore the relationship between government subsidies and green innovation (GINN), with a specific focus on the moderating effect of marketization. We find that government subsidies not only significantly promote substantive green innovation (UGINN) and strategic green innovation (TGINN) but also improve business performance. The moderating effect model demonstrates the presence of market failure in GINN. We also show that marketization index (MI), environmental information disclosure (EDI), highly polluting industries (HPI), and manufacturing (MF) have significant moderating effects. The mechanism analysis further elucidates that government subsidies promote GINN by encouraging increased R&D investments. However, it is essential to note that these subsidies can also lead to inefficient investments by enterprises, resulting in a waste of resources. We offer significant enlightenment for understanding the government’s role in promoting GINN in enterprises and improving relevant subsidy policies.

Suggested Citation

  • Shengling Zhang & Zihao Wu & Wei Dou & Yao Wang, 2025. "Do government subsidies promote enterprise green innovation? Evidence from listed companies in China," Applied Economics, Taylor & Francis Journals, vol. 57(10), pages 1124-1144, February.
  • Handle: RePEc:taf:applec:v:57:y:2025:i:10:p:1124-1144
    DOI: 10.1080/00036846.2024.2311069
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2024.2311069
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00036846.2024.2311069?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:57:y:2025:i:10:p:1124-1144. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.