Going Green on the Government’s Dime: Unpacking the Subsidy Boost in Family Firms

Xiaoqing Dong (), Guangshun Cheng and Yuan Ren
Additional contact information
Xiaoqing Dong: Business School, University of Jinan, Jinan 250002, China
Guangshun Cheng: Business School, University of Jinan, Jinan 250002, China
Yuan Ren: School of Business, Nanjing University, Nanjing 210008, China

Sustainability, 2025, vol. 17, issue 10, 1-25

Abstract: Family businesses play a vital role in the global economy as an organizational form that has evolved over time. However, Chinese family firms generally suffer from insufficient investment in research and development. Based on panel data of Chinese listed family firms from 2008 to 2022, this study investigates the impact of government green subsidies on family firms’ green innovation, along with the heterogeneity of such effects under different scenarios. The results show that government green subsidies significantly promote both strategic and substantive green innovation. The moderating effect analysis reveals that economic policy uncertainty weakens the baseline effect. Further analysis confirms that the positive impact of green subsidies is achieved by alleviating firms’ R&D funding constraints. Heterogeneity analysis indicates that green subsidies have a stronger effect on non-heavily polluting firms; they promote substantive green innovation more effectively in firms with low managerial green cognition, and strategic green innovation in those with high cognition. Additionally, the effects vary across the firm life cycle: green subsidies enhance strategic green innovation during the growth and maturity stages, and substantive green innovation during the growth and decline stages. This study reveals the mechanisms through which government green subsidies affect green innovation in family firms and offers policy implications for promoting sustainable development in the family business sector.

Keywords: government green subsidy; economic policy uncertainty; family firm; green innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/10/4547/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/10/4547/ (text/html)

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:gam:jsusta:v:17:y:2025:i:10:p:4547-:d:1657065

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().