The Effect of Economic Policy Uncertainty on Green Technology Innovation: Evidence from China’s Enterprises

Xuan Yang, Shihao Mao, Luxuan Sun, Chao Feng and Yinshuang Xia ()
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Xuan Yang: Nanyang Technopreneurship Center, Nanyang Technological University, Singapore 637553, Singapore
Shihao Mao: Nanyang Technopreneurship Center, Nanyang Technological University, Singapore 637553, Singapore
Luxuan Sun: China-UK Low Carbon College, Shanghai Jiao Tong University, Shanghai 201306, China
Chao Feng: School of Economics and Business Administration, Chongqing University, Chongqing 400030, China
Yinshuang Xia: School of Economics and Management, Tongji University, Shanghai 200092, China

Sustainability, 2022, vol. 14, issue 18, 1-17

Abstract: In some cases, enterprise fears uncertainty more than the policy itself, and this fear can impede innovation. However, this study finds that uncertainty is the source of enterprise’s innovation. We took Chinese A-share listed companies from 2010 to 2018 as the research sample and studied the impact of economic policy uncertainty (EPU) on green technology innovation (GTI). Based on China’s EPU index and green patent-application data of Chinese-listed enterprises, this study adopted a panel fixed regression model and found that EPU has a slightly promoting effect on GTI of Chinese-listed enterprises. This effect is also affected by enterprise ownership and industry characteristics. Among them, EPU has a stronger promoting effect on GTI activities of state-owned enterprises and high-tech enterprises than common enterprises. In particular, if EPU increases, the GTI of high-polluting enterprises is not as great as the incentive effect of ordinary enterprises. The reasons may be that state-owned enterprises have more implicit capital guarantees, high-tech enterprises have higher innovation motivation, and high-polluting enterprises have stronger dependence on traditional production equipment. These results can provide a reference for the debate on “uncertainty.” The conclusions of this paper contain unique policy implications.

Keywords: economic policy uncertainty; green technology innovation; enterprise ownership; heterogeneity; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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