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Green innovation in the face of external uncertainty: Insights from US climate policies

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  • Jiang, Yong
  • Klein, Tony
  • Ren, Yi-Shuai
  • Xiong, Yuan-Kun

Abstract

This study investigates the impact of the U.S. climate policy uncertainty (CPU) on the green innovation output of firms, with a particular focus on Chinese A-share listed companies from 2009 to 2020. The findings reveal that the U.S. CPU can act as a catalyst for enhancing green innovation among Chinese firms. The heterogeneity analysis reveals that the U.S. CPU significantly influences green innovation in state-owned firms and heavy-polluting firms, firms with ownership by more institutional investors, and firms that are either in a growth or in a decline phase. Further mechanism analysis indicates that the increasing U.S. CPU enhances firms' green innovation outcomes via three channels: mitigating corporate financial distress risk, increasing government subsidies, and altering the competitive landscape. In addition, firms' climate risk exposure amplifies the effect of CPU, whereas proactive government climate policies tend to weaken it. Our research findings provide substantial insights for investors and governmental agencies in comprehending the effects of cross-border spillover from climate policies on firm innovation.

Suggested Citation

  • Jiang, Yong & Klein, Tony & Ren, Yi-Shuai & Xiong, Yuan-Kun, 2026. "Green innovation in the face of external uncertainty: Insights from US climate policies," Energy Economics, Elsevier, vol. 153(C).
    • Handle: RePEc:eee:eneeco:v:153:y:2026:i:c:s0140988325009119
    DOI: 10.1016/j.eneco.2025.109081
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