Economic policy uncertainty and green innovation based on the viewpoint of resource endowment

The existing literature shows a conspicuous research gap of the impacts of the economic policy upon green innovation. This study tries to fill in the gap by investigating how economic policy uncertainty (EPU) affects green innovation via the 2005-2016 data of 269 Chinese cities based on their financial situations and city statuses. Resource endowment, as a moderator, is also under investigation for the corresponding mechanisms. Our empirical results show that EPU promotes green innovation within a threshold and the negative inhibiting impacts arise when EPU transcends the turning point. The implications suggest that actions be taken by both governments and enterprises to promote innovation and alleviate negative effects of uncertainty. Economic development models should be updated for Chinese resource-based cities to diminish resource dependence and promote green innovation through the reinforcement of the collaborations of enterprises, universities and institutes.

Automated summary

This study fills the research gap on the impacts of economic policy on green innovation by investigating the effects of economic policy uncertainty (EPU) on green innovation using data from 269 Chinese cities between 2005 and 2016. The empirical results suggest that EPU promotes green innovation up to a certain point, but has negative inhibiting impacts beyond a threshold. This highlights the importance of taking actions to promote innovation and alleviate negative effects of uncertainty by both governments and enterprises, especially in resource-based cities.