Climate disasters and processing of green patents

Abstract

AbstractUsing Chinese data, this paper reveals that climate disaster events have a positive impact on the granting of green invention patents. The occurrence of climate disasters leads the patent‐granting officials to overestimate the likelihood of disaster recurrence, strengthens their perception of environmental protection as urgent, and consequently increases the number of patents that they grant. Salience bias, the tendency to overestimate probabilities due to the occurrence of salient events, is widely studied in psychology and behavioral finance. This paper extends this research by examining the influence of salience bias on people's behavior in processing green invention patents, with a specific focus on climate disaster events in Beijing, the headquarters of China's patent examination authority. In addition to the overall positive impact on granted patent numbers, the paper finds that (i) the influence of salience bias is temporary, with a more pronounced effect on energy‐saving patents than on other categories  of patents, and (ii) the primary effect is on green invention patents filed by firms in Beijing, with the effect of salience bias rapidly diminishing as the distance of the application city from Beijing increases.