Does R&D input matter the impact of financial resources allocation on green production in china’s energy sectors

Abstract

Corporate financial resources are always a tool to support their greenization. This paper investigates whether R&D input inspires financial resources allocation to better promote green production in China’s energy sectors because of their pillar status to national industrial layout, significant impacts on climate change, and distinctive governance structure. By investigating 254 firm-year observations of China’s energy sectors, we find that their R&D input (including funds and personnel inputs) is at a low level, and it has not improved green production. While R&D input can help release the allocation pressure of financial resources (including asset impairment, shareholders equity, and tax structure) in green production and shows a robust role of the two R&D indicators. Our theoretical model helps directly link financial resources allocation and greenization, and empirical results suggest exploring more transmission paths to address cask effects of resources allocation for climate-friendly operations in heavy-polluting sectors especially in emerging markets.