How Does Climate Policy Uncertainty Affect Green Innovation? Evidence from China

Ke Mao; Junxin Huang

doi:10.3390/ijerph192315745

How Does Climate Policy Uncertainty Affect Green Innovation? Evidence from China

Int J Environ Res Public Health. 2022 Nov 26;19(23):15745. doi: 10.3390/ijerph192315745.

Authors

Ke Mao^{1

2}, Junxin Huang³

Affiliations

¹ Business School, Xiangtan University, Xiangtan 411105, China.
² Business School, Hunan Institute of Technology, Hengyang 421002, China.
³ Chemistry and Environment School, Hunan Institute of Technology, Hengyang 421002, China.

Abstract

In response to climate change, governments have adopted various climate policies. However, climate policy uncertainty (CPU) may have important implications for the business sector. Is enterprise green innovation (GI) affected by CPU? This study investigates the impact of CPU on enterprise GI. The China CPU index is created first in this study. It uses panel data from Chinese A-share listed companies in China from 2010 to 2021 to explore the impact of CPU on GI through the fixed effects model, the mediating effects model, and the moderating effects model. The results show that: (1) CPU significantly suppresses GI, according to the findings. (2) CPU inhibits enterprise GI by exacerbating enterprise financing constraints. (3) Government subsidies can mitigate the inhibiting effect of CPU on GI. (4) There is heterogeneity in the negative impact of CPU on enterprise GI, mainly on non-state-owned enterprises. This study suggests several recommendations for coping with CPU in China.

Keywords: climate policy uncertainty (CPU); government subsidies; green innovation (GI).

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Adaptation, Psychological
Asian People
China
Government*
Humans
Policy*
Uncertainty

Grants and funding

This research was funded by the Hunan Province Philosophy and Social Science Planning Fund Project (grant number 18YBJ11), and jointly supported by the Hunan Provincial Education Department Excellent Youth Fund Project (grant number 20B165).