Oil price, green innovation and institutional pressure: A China's perspective

Jinyan Hu, Kai-Hua Wang, Chi Wei Su and Muhammad Umar

Resources Policy, 2022, vol. 78, issue C

Abstract: Oil is of dominated role in global energy market, and its price volatility would bring significant economic and environmental consequents. Given China is the largest oil importer, this paper applies the mixed frequency vector autoregression (MF-VAR) to investigate the causal relationship among oil price (OP), green innovation (GI), and institutional pressure (IP). The empirical results from MF-VAR model show that quarterly OP would stimulate GI with time-varying, which is not found in low frequency vector autoregression (LF-VAR). The new evidence mainly due to the mix frequency technique, which allows heterogeneous impacts exist between high and low frequency variables. In addition, higher IP is also discovered to promote GI. The major contribution is that a theoretical framework is initially constructed, and oil price is proven to as important booster for China's green innovation. Therefore, some policies such as innovation subsidy and green credit need to be employed to reduce the impacts from oil price fluctuations and main sustainable GI capability. Meanwhile, IP mainly from environmental protection requires government to launch stricter environmental regulations and laws, and establish reward and punishment mechanism to promote GI.

Keywords: Oil price; Green innovation; Institutional pressure; Mixed frequency vector autoregression (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:78:y:2022:i:c:s0301420722002367

DOI: 10.1016/j.resourpol.2022.102788

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