Uncertainty of uncertainty and corporate green innovation—Evidence from China

Xiaohang Ren, Xixia Xia and Farhad Taghizadeh-Hesary

Economic Analysis and Policy, 2023, vol. 78, issue C, 634-647

Abstract: The study assesses the effect of economic policy uncertainty’s ex-post volatility, measured as σ_EPU, on firm green innovation (GI). The results shed new light on the important factors for corporate green innovation. First, the volatility of economic policy uncertainty significantly reduces firm GI, with a greater impact on determining GI than economic policy uncertainty itself. Second, the negative nexus between σ_EPU and GI is more notable for non-state-owned and non-heavily-polluting firms, as well as firms with lower financing constraints, weaker environmental regulation, and lower marketization levels. Third, positive investor sentiment suppresses the hindering effect of σ_EPU on GI. Our findings remain valid after robustness tests. This study serves as a contribution to the literature on uncertainty and green innovation, as well as the literature on the effect of σ_EPU.

Keywords: Uncertainty of uncertainty; Green innovation; Economic policy uncertainty; Investor sentiment (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592623000474
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:78:y:2023:i:c:p:634-647

DOI: 10.1016/j.eap.2023.03.027

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().