The government’s environmental attention and corporate green innovation: A threshold analysis and quantile regression approach

Abstract

Based on an analysis of 643 listed firms in clean technology sectors, this study explores the nonlinear impact of the government’s environmental attention (GEA) on firms’ green innovation by exploiting threshold and quantile regression techniques on Stata 17. We show that a double threshold exists when the level of the GEA is 51 or 104, above which the positive impact of the GEA on green innovation in cleantech firms significantly diminishes. The results from the quantile regression further indicate that cleantech firms receive almost no benefits from the GEA at lower levels of green innovation. Thus, policy-makers designing environmental policies should consider that the marginal benefit of environmental attention on green innovation wanes beyond certain levels, especially for firms that lack sufficient enthusiasm for innovation.