Research on the Impact Mechanism of Government Subsidies on Green Innovation of Enterprises

Under the background of the China’s Double-Carbon Policy proposed in the 14th Five-Year Plan, promoting the research and development of green innovation is an important way to solve the contradiction between economic growth and environmental sustainability. Based on the panel data of Chinese A-share listed companies in Shanghai and Shenzhen from 2010 to 2021, we empirically examine the impact of government subsidies on corporate green innovation, as well as the moderating role of financing constraints and market power in this process. The empirical results show that government subsidies can promote enterprise green innovation. However, financing constraints and market power will weaken the positive impact of government subsidies on green innovation. We have great significance to promote the green innovation of listed enterprises and realize the sustainable development of our country's economy.