The nonlinear impact of economic policy uncertainty on corporate green total factor productivity

Siqi Zou and Yang Long

Finance Research Letters, 2025, vol. 77, issue C

Abstract: This study investigates the nonlinear impact of economic policy uncertainty (EPU) on corporate green total factor productivity (GTFP), examining the moderating role of intelligent transformation (IT). Analyzing firm-level data from Chinese listed companies (2010–2022), we document an inverted U-shaped relationship between EPU and GTFP, where moderate uncertainty catalyzes environmental innovation while excessive uncertainty impedes it. IT significantly enhances firms' adaptive capacity, amplifying positive effects of manageable uncertainty while mitigating adverse impacts of high uncertainty. Heterogeneity analysis reveals distinct patterns across industry types, with high-tech and non-pollution-intensive sectors demonstrating greater resilience to policy volatility. These findings advance uncertainty management theory and provide actionable insights for environmental policy formulation.

Keywords: Economic policy uncertainty; Green total factor productivity; Intelligent transformation; Nonlinear effects; Sustainability (search for similar items in EconPapers)
JEL-codes: D80 O33 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003095

DOI: 10.1016/j.frl.2025.107045

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