Essays on the economics of green innovation and climate policy

Zheng, Yang (2023) Essays on the economics of green innovation and climate policy. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis consists of four chapters spanning climate policy and green innovation. The first chapter identifies the impacts of China’s regional emission trading scheme pilots on firm carbon emissions and other economic outcomes using a unique dataset of Chinese firm tax records. The results demonstrate evidence that China’s ETS reduces carbon emissions despite low carbon prices and infrequent trading. This chapter also identifies the channels through which firms respond to ETS by adjusting energy consumption and sources, employment, capital, and productivity. The second chapter assesses the impacts of ETS on low-carbon innovation of unregulated subsidiary firms affiliated with regulated firms. The findings demonstrate that ETS induces low-carbon innovation of unregulated subsidiaries and suggest policy spillovers of ETS through corporate ownership networks. Such policy spillovers are contingent on technological proximity between parent firms and their subsidiaries, top managers with R&D experience, and parent firms’ financial constraints. The third chapter investigates the relationship between firms’ green revenues and clean innovation. Using a global firm dataset disaggregating commercial activities based on a new green taxonomy, this chapter finds that firms’ green revenues are enhanced by their own clean innovation and clean innovation of other firms close in technological and product market spaces. Such results suggest both private and social economic benefits of clean innovation. The last chapter explores the role of foreign direct investment in green knowledge spillovers to Chinese domestic firms. Through text-mining business description and tracking patents of foreign-invested firms in China, this chapter develops new definitions of green FDI and identifies the impacts of knowledge stocks resulting from green FDI firms on green innovation of domestic firms. The findings show that knowledge stocks of green FDI firms in downstream industries drive domestic firms’ green patents and suggest knowledge spillovers from downstream green FDI.

Item Type:	Thesis (PhD)
Additional Information:	© 2023 Yang Zheng
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor T Technology > T Technology (General)
Sets:	Departments > Geography and Environment
Supervisor:	Dugoua, Eugenie and Sato, Misato and Atkinson, Giles
URI:	http://etheses.lse.ac.uk/id/eprint/4585

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