Effects of subsidy and tax rebate policies on green firm research and development efficiency in China

This study attempts to fill important knowledge gaps to explore the distinct symbolic influences of subsidy and tax rebate policies on green firm research and development (R&D) efficiency using the global Malmquist-Luenberger (GML) index method, while focusing on green industries in China. Our empirical results demonstrate that the subsidies and tax rebates received from local and central gov-ernments have significant U-shaped impacts on green firm R&D efficiency at the 10% significance level, and subsidies and tax rebates have significant and positive interactions with green firm R&D efficiency under the U-shaped effects of subsidies and tax rebates at the 1% significance level. Furthermore, sub-sidies and tax rebates play distinct transmission roles in influencing green firm R&D efficiency by stimulating R&D investment, boosting technical efficiency change, and facilitating technical progress change.(c) 2022 Elsevier Ltd. All rights reserved.

Automated summary

This study fills the knowledge gaps by exploring the distinct symbolic influences of subsidy and tax rebate policies on green firm research and development efficiency, using the global Malmquist-Luenberger index method. The empirical results demonstrate that subsidies and tax rebates received from local and central governments have significant U-shaped impacts on green firm R&D efficiency, and they have significant and positive interactions with green firm R&D efficiency under the U-shaped effects of subsidies and tax rebates. Furthermore, subsidies and tax rebates play different roles in influencing green firm R&D efficiency by stimulating R&D investment, boosting technical efficiency change, and facilitating technical progress change.