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Carbon peaking pressure and corporate R&D investment

Author

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  • Sun, Dan
  • Li, Yiping

Abstract

The goal of “double carbon” presents both challenges and opportunities for China's manufacturing sector. This study examines the impact of regional carbon peaking pressure (CPP) on corporate R&D investment, using panel data from Chinese A-share listed manufacturing firms between 2015 and 2020. By employing a two-stage least squares approach, we find that higher CPP significantly boosts R&D investment, particularly in R&D-intensive firms, state-owned enterprises, and firms with lower tax payments. In contrast, firms with lower R&D investment ratios, private firms, and major tax contributors exhibit a weaker response to CPP. In addition, while CPP increases R&D investment, it also introduces trade-offs, such as reduced management expenses and temporary declines in productivity.

Suggested Citation

  • Sun, Dan & Li, Yiping, 2025. "Carbon peaking pressure and corporate R&D investment," Economics Letters, Elsevier, vol. 251(C).
    • Handle: RePEc:eee:ecolet:v:251:y:2025:i:c:s016517652500165x
    DOI: 10.1016/j.econlet.2025.112328
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    Keywords

    Carbon peaking pressure; Research and development; Total factor productivity; Management expenses; Manufacturing enterprises;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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