The Impact of Climate Policy Uncertainty on the Quality of Firm Innovation: A Market Surveillance Perspective

Da Wang, Hao Tian, Haotian Zhu and Dazheng Xu

Emerging Markets Finance and Trade, 2025, vol. 61, issue 12, 3691-3710

Abstract: This study examines the impact mechanism of climate policy uncertainty on corporate innovation quality using a sample of Chinese listed companies from 2001 to 2022. The findings indicate that heightened climate policy uncertainty significantly diminishes the level of corporate innovation quality. This adverse effect operates primarily through two channels: reducing firms’ operating income and increasing financing constraints, thereby impeding innovation development and enhanced external market regulation mitigates the negative effects. Additionally, the study observes the adverse impact mechanism of climate policy uncertainty on innovation quality is more pronounced in firms engaged in carbon trading markets, non-high-tech firms, and non-state-owned enterprises.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:61:y:2025:i:12:p:3691-3710

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DOI: 10.1080/1540496X.2025.2488212

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