Perceived uncertainty, low-carbon policy, and innovation investment: evidence from Chinese listed new energy companies

Abstract

Uncertainty can bring about challenges to the operations of the energy industry, which may inevitably affect corporate innovation decisions. This study uses the firm-level data from the new energy sector in China to examine how perceived uncertainty affects their innovation decisions. It is found that new energy companies significantly increase innovation activities when perceiving high uncertainty. In addition to directly promoting innovation investment, a low-carbon policy can also indirectly increase the innovation investment of new energy companies in response to perceived uncertainty. Specifically, a low-carbon policy can significantly increase government subsidies and reduce the financing constraints of new energy companies, thereby increasing their innovation effect against perceived uncertainty. Furthermore, the uncertainty–innovation nexus is significantly positive in companies with different ownership, but some differences exist in the effects and mechanisms.