Innovation or imitation? The impacts of financial factors on green and general research and development

This paper empirically investigates the influences of financial factors (constraint, sources, and supports) on firms' research and development (R & D). We separately consider general R & D and green R & D. Further, under each R & D, we distinguish between independent innovation and dependent imitation. We acquire firm-level data from Business Environment and Enterprise Performance Survey (BEEPS) between 2017 and 2019 and find that a stringent financial constraint in tandem with undiversified financing sources most severely impede both general and green R & D. Overall, innovation is more sensitive to financial factors than imitation; relatively, green innovation is the most sensitive while green imitation is the least.