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

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  • Ke Mao

    (Business School, Xiangtan University, Xiangtan 411105, China
    Business School, Hunan Institute of Technology, Hengyang 421002, China)

  • Junxin Huang

    (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.

Suggested Citation

  • Ke Mao & Junxin Huang, 2022. "How Does Climate Policy Uncertainty Affect Green Innovation? Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-14, November.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:23:p:15745-:d:984961
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    References listed on IDEAS

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    1. Blampied, Nicolás & Mahadeo, Scott Mark Romeo, 2023. "Uncertainties under monetary tightening and easing shocks and different market states," Finance Research Letters, Elsevier, vol. 55(PA).

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