Climate Policy Uncertainty and Entrepreneurship: Lubricant or Retardant?

ABSTRACT In the context of global climate crisis, climate policy uncertainty has become an increasingly prominent factor influencing economic development and technological advancement. This research aims to examine the relationship between Chinese climate policy uncertainty (CCPU) and entrepreneurship and further explore its underlying mechanisms. The findings reveal that CCPU is positively associated with entrepreneurship. Mechanism analysis suggests that financing conditions and green innovation may serve as important channels through which CCPU is associated with entrepreneurship. Further analysis shows that CCPU is linked to higher levels of entrepreneurship in coastal regions and cities with advanced financial development and a favorable business environment. It also shows a stronger positive relationship with medium‐sized enterprises and productive service industries. Notably, only when the level of regional resource misallocation is below the threshold value of 1.3207 (the 59th percentile) and the level of digital development is above the threshold value of 0.1570 (the top 14%) can this effect be realized. This study not only contributes to the existing literature on the consequences of CCPU but also provides policy recommendations aimed at fostering high‐quality entrepreneurship under conditions of uncertainty.