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Innovation under dual policies: The impact of R&D subsidies and emissions trading on green patenting in Sweden

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  • Coria, Jessica
  • Jaraitė, Jūratė

Abstract

This paper examines whether the EU Emissions Trading Scheme (EU ETS) and innovation subsidies interact to enhance green innovation at the firm level. Using staggered difference-in-differences and matched samples, we find no evidence of synergetic effects: firms subject to both the EU ETS and innovation subsidies do not outperform those subject only to subsidies in terms of green patenting outcomes. By contrast, subsidies alone have a clear positive impact on green innovation. Firms receiving subsidies generate more green patents, receive more citations, and develop technologies with greater technical scope, especially when subsidy amounts are large. These findings imply that, while environmental policies like the EU ETS might create demand for green innovation, substantial subsidy support is essential to overcome market failures and promote the development and patenting of green technologies.

Suggested Citation

  • Coria, Jessica & Jaraitė, Jūratė, 2026. "Innovation under dual policies: The impact of R&D subsidies and emissions trading on green patenting in Sweden," Research Policy, Elsevier, vol. 55(2).
    • Handle: RePEc:eee:respol:v:55:y:2026:i:2:s0048733325002070
    DOI: 10.1016/j.respol.2025.105378
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    Keywords

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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