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Extreme climate attention and corporate energy innovation: Empirical evidence from China

Author

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  • Wang, Hua
  • Tan, Xinyu
  • Li, Mengzhe

Abstract

This paper examines Chinese A-share companies between 2007 and 2023 to find out how extreme climate attention affects their energy innovation. Extreme climate attention notably promotes corporate energy innovation. Mechanism analysis reveals that extreme climate attention primarily enhances corporate energy innovation by increasing R&D investment, promoting digital transformation, and reducing agency costs. We conduct a deeper analysis and determine that the observed impact is more pronounced for businesses facing heightened regional environmental regulatory pressures, greater uncertainty of climate policy and fierce industry competition. A good governance environment and financial position make extreme climate attention even more conducive to corporate energy innovation. In addition, extreme climate attention has only been a significant contributor to alternative energy innovations. Finally, the energy innovations promoted by extreme climate attention have improved enterprises' energy efficiency. This paper provides empirical evidence and enlightenment to help enterprises handle climate change and promote low-carbon energy transformation and sustainable development.

Suggested Citation

  • Wang, Hua & Tan, Xinyu & Li, Mengzhe, 2025. "Extreme climate attention and corporate energy innovation: Empirical evidence from China," Energy Economics, Elsevier, vol. 148(C).
    • Handle: RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325005080
    DOI: 10.1016/j.eneco.2025.108681
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