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July 12, 2026Emerging Markets Finance and Trade0 citations

Subsidy Showdown: Which Clean Energy Incentives Deliver Real Innovation Impact?

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FLFengyun LiuPDPengfei DengCLChien‐Chiang Lee

Key Points

  • This research aims to clarify the effectiveness of various clean energy subsidies in driving technological innovation.
  • Data collected from Chinese listed clean energy companies was classified into R&D and non-R&D subsidies as per a partial equilibrium model.
  • Subsidies categorized into 2 main and 7 subcategories focusing on their impact on innovation.
  • Analyzed the correlation between different subsidies and the innovation outcomes of clean energy companies.
  • R&D subsidies exhibit an inverted U-shaped effect on innovation in clean energy companies, indicating a peak impact followed by decline.
  • Non-R&D subsidies show a U-shaped effect, suggesting initial dependency before promoting further innovation.
  • Specific subsidies, such as talent development and innovation awards, lead to strategic innovation rather than substantive innovation in larger companies.

Abstract

The government adopts various subsidies to support clean energy technological innovation, but their effectiveness and associated mechanisms need to be clarified. Thus, the various mechanisms of R however, innovation and development subsidies that focus on the research project do not suffer from this problem. Among NRDSs, excessive social security subsidies may lead to a dependency mentality among companies; however, enterprise support subsidies and energy conservation and environmental protection subsidies do not have such a problem. Moreover, RDSs can induce state-owned, large, and eastern companies to pursue strategic innovation, but also effectively promote substantive innovation among small companies and those in the central region.

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Cite This Study

Liu et al. (2026) studied this question.

synapsesocial.com/papers/6a532e624f7abc118adecb84https://doi.org/10.1080/1540496x.2026.2698620
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