Impact of green subsidies on green innovation of environmental service firms in China

This research investigates the influence of green subsidies on the green innovation of environmental service firms using multiple linear regression. It covers the years 2014 through 2020 for environmental service firms listed on the Shanghai and Shenzhen Stock Exchanges. The results demonstrate that: 1) green subsidies can encourage the green innovation of environmental service firms, and research and development (R&D) investment mediates this effect; 2) the intensity of environmental regulation moderates the relationship between R&D investment and green innovation in a negative manner; 3) in less developed regions, green subsidies are more effective for promoting green innovation. These findings may assist the government in establishing green subsidy programs and developing sensible environmental policies to promote the green development of environmental service firms.