Green signals: The impact of environmental protection support policies on firms' green innovation
研究中国环保支持政策如何通过信号效应帮助企业获取外部资源，从而促进绿色创新，基于2003-2020年A股上市公司面板数据。
Abstract The importance of government environmental financial incentives in stimulating firms' green innovation has long been recognized. However, researchers have yet to fully determine how a small amount of financial incentives can be used to promote expensive green innovation. Unlike prior studies based on the investigation of direct effects, this study provides a new perspective by employing signaling theory. Focusing on environmental protection support policy (EPSP) in China, it employs ordinary least squares (OLS) regression and generalized structural equation modeling (GSEM) to analyze a sample of panel data from China's A‐share listed companies from 2003 to 2020. The results suggest that EPSP funding can serve as a green signal that helps firms acquire external resources for green innovation. The results of this study enhance our understanding of the role that government financial incentives play in firms' green innovation and inform policymakers on how to formulate effective environmental policies.