Impact of Climate Change on Green Technology Innovation—An Examination Based on Microfirm Data

Abstract

Against the pressing backdrop of global climate change, various environmental issues are becoming increasingly prominent, posing unprecedented challenges to both the global economic system and business operations. Green technology innovation, as a critical response to climate change, is vital not only for the sustainable development of firms, but also for fostering the harmonious coexistence of the economy and environment. However, whether climate change itself affects green technology innovation activities is still a topic that needs to be explored in depth. This paper utilizes data from the China Meteorological Administration (CMA), State Intellectual Property Office of China (SIPO), and CRNDS database to empirically examine the impact of climate change on green technology innovation of Chinese A-share listed firms from 2011 to 2020. The findings indicate the following: (1) Climate change significantly inhibits green technology innovation. (2) Entrepreneurs’ green human capital can mitigate the negative impact of climate change on green technology innovation. (3) When faced with higher investor attention or stronger environmental regulation, firms will pay more attention to their green technology innovation when adversely affected by climate change. (4) Resource-based cities show greater resilience against the negative impacts of climate change on green technology innovation compared to non-resource-based cities, suggesting that climate change-induced adaptive behavior may break the resource curse. (5) Mature, non-polluting, high-tech, and non-manufacturing firms are more effective in resisting the inhibitory effects. This research contributes to understanding climate risks and managing them effectively.