Chinese firms boost green innovation when economy gets uncertain
A new analysis of 2007–2023 data from Chinese listed companies reveals a counterintuitive pattern: firms ramp up green innovation spending during periods of economic policy uncertainty. The finding suggests corporate leaders see sustainability investments not just as an environmental imperative, but as a strategic hedge against macroeconomic turbulence.
Originaltitel: Does economic policy uncertainty affect corporate green innovation? evidence from China
This study explores how firms adjust their green innovation (GI) activities as a business strategy in response to economic policy uncertainty (EPU). Using a data set of listed firms in China over the period 2007–2023, we find that firms increase their GI engagement during periods of increased EPU. We also find that the positive association between EPU and GI activities is more pronounced in firms with lower investor attention, when investor sentiment is optimistic, and in firms with higher reputation capital. Our analysis suggests that GI activities may help firms to alleviate the impact of increasing economic uncertainties. We also argue that the strategic role of GI deserves attention from managers, investors and policymakers alike.