Journal
TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE
Volume 173, Issue -, Pages -Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.techfore.2021.121123
Keywords
Environmental subsidies; Environmental technology innovation; Environmental management innovation; Chinese listed firms
Categories
Funding
- National Natural Science Foun-dation of China [71974205]
- Major Projects of the National Natural Science Foundation of China [72091313]
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This study finds that environmental subsidies from the Chinese government significantly boost firms' environmental management innovation, but do not have a statistically significant impact on environmental technology innovations. There is also no statistically significant relationship between firms' environmental management innovations and environmental technology innovations. These findings are consistent across a range of robustness tests.
Although one of the main reasons why governments offer environmental subsidies to firms is to encourage environmental innovation, the effectiveness of such measures is unclear. In this study, we examine the effects of subsidies on firms' environmental innovation activities (i.e. environmental technology innovations and environmental management innovations). We use fine-grained panel data on Chinese listed manufacturing companies over the period 2011-2015. We find that whilst Chinese government environmental subsidies boost firms' environmental management innovation significantly, their effect on environmental technology innovations is not statistically significant. We employ an instrumental variable two-stage least squares (IV-2SLS) approach to handle potential selection bias. We find also that there is no statistically significant relationship between firms' environmental management innovations and environmental technology innovations. These findings hold for a range of robustness tests.
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