Uncertainty as a catalyst? The dual role of economic policy uncertainty in green technology innovation in China

Abstract As China pursues high-quality, innovation-driven growth, it faces rising economic policy uncertainty (EPU) fuelled by information gaps, changing policy priorities and geopolitical tensions. Yet how EPU shapes green technology innovation remains contested. Analysing panel data from A-share listed companies (2009–2019), this study reveals that EPU motivates enterprises to improve green innovation levels. Mechanism analysis shows that EPU increases R&D investment and strengthens environmental, social and governance (ESG) performance, especially among large and state-owned enterprises, while significantly reducing the effectiveness of environmental subsidies. These findings suggest EPU acts as a strategic catalyst, though patent growth may partly reflect strategic filing behaviour rather than substantive technological progress. Consequently, policy frameworks must provide predictable, long-term support. Governments should improve subsidy mechanisms and promote adaptive R&D strategies to utilize uncertainty as a driver for green transformation. While the 2009–2019 scope ensures data reliability, the results’ external validity should be considered alongside post-2020 macroeconomic and geopolitical shifts.