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Economic Perspectives and Trends

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ArticleOpen Access http://dx.doi.org/10.26855/ept.2024.12.006

The Influence of Government on Enterprise Green Innovation

Huijuan Fu

Southeast University - Monash University Joint Graduate School (Suzhou), Southeast University, Suzhou 215123, Jiangsu, China.

*Corresponding author: Huijuan Fu

Published: November 25,2024

Abstract

With the increasing prominence of global environmental issues, promoting corporate green innovation has become a key to achieving sustainable development. Government subsidies, as an important policy instrument, are believed to effectively motivate enterprises to engage in green innovation activities. This paper takes Chinese A-share listed automotive companies from 2011 to 2019 as research samples and employs a fixed-effects model and instrumental variable methods to systematically analyze the positive impact of government subsidies on corporate green innovation and its underlying mechanisms. The findings indicate that government subsidies exert a substantial positive influence on corporate green innovation. Research has revealed that government subsidies are more inclined to foster strategic green innovation as opposed to substantive green innovation. This may be because strategic-oriented eco-friendly innovation development is more susceptible to policy orientation and market expectations, while substantive green innovation requires higher technological breakthroughs and long-term investments. However, some studies also point out government subsidies can effectively promote substantive green innovation in certain situations, especially in regions with higher institutional quality.

Keywords

Government subsidies; enterprise; green innovation

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How to cite this paper

The Influence of Government on Enterprise Green Innovation

How to cite this paper: Huijuan Fu. (2024) The Influence of Government on Enterprise Green Innovation. Economic Perspectives and Trends, 1(1), 22-26.

DOI: http://dx.doi.org/10.26855/ept.2024.12.006