The Impact of Economic Policy Uncertainty on Enterprise Green Innovation: A Study on the Moderating Effect of Carbon Information Disclosure
Round 1
Reviewer 1 Report
This paper finds that the increase in economic policy uncertainty is not conducive to enterprises' decision-making on green innovation. However, the improvement of the quality of carbon information disclosure can promote the occurrence of green innovation in enterprises. Now it can be accepted. Some fresh paper can be added, eg:
Liu F. et al., 2023. Assessing the role of economic globalization on energy efficiency: Evidence from a global perspective, China Economic Review, 77, 101897. https://doi.org/10.1016/j.chieco.2022.101897.
Sun H., Edziah B K., Kporsu A.K., Sarkodie S A., Taghizadeh-Hesary F. Energy efficiency: the role of technological innovation and knowledge spillover，Technological Forecasting & Social Change，2021，120659. https://doi.org/10.1016/j.techfore.2021.120659
1.What is the meaning of Economic Policy Uncertainty, authors should give more details.
2.For the impact of Enterprise Green Innovation: why only use the Study on the Moderating Effect of Carbon Information Disclosure? not others, like mediating effect?
Author Response
Dear Reviewers:
Thanks a lot for your valuable suggestions for the essay The Impact of Economic Policy Uncertainty on Enterprise Green Innovation: A Study on the Moderating Effect of Carbon Information Disclosure. Our team has carefully studied your pertinent advice and take the time to read the relevant literature. We use the weekend to carefully revise and adjust. Meanwhile, through the MDPI‘s English editing service, the essay is polished and optimized. Next, I'll explain our revised responses to each of your suggestions. Also, all the revises I mentioned are annotated in the form of comments in the WORD. Convenient for you to review.
Firstly, you mentioned that “What is the meaning of Economic Policy Uncertainty, authors should give more details.” We have added a lot of details to the Introduction and Literature Review sections in the form of a review. And the scholar literature we refer to is quite influential and academic. At the same time, we have also added a lot of literature review content to enrich the article. Including but not limited to the following literatures：
（1）Liu F. et al., 2023. Assessing the role of economic globalization on energy efficiency: Evidence from a global perspective, China Economic Review, 77, 101897. https://doi.org/10.1016/j.chieco.2022.101897.
（2）Sun H., Edziah B K., Kporsu A.K., Sarkodie S A., Taghizadeh-Hesary F. Energy efficiency: the role of technological innovation and knowledge spillover，Technological Forecasting & Social Change，2021，120659. https://doi.org/10.1016/j.techfore.2021.120659
（3）Xin Cui, Chunfeng Wang, Ahmet Sensoy, Jing Liao, Xiaochen Xie,Economic policy uncertainty and green innovation: Evidence from China, Economic Modelling,Volume 118,2023.
（4） Yang, X.; Mao, S.; Sun, L.; Feng, C.; Xia, Y. The Effect of Economic Policy Uncertainty on Green Technology Innovation: Evidence from China’s Enterprises. Sustainability 2022, 14, 11522. https://doi.org/10.3390/su141811522.
（5）Green innovation transformation, economic sustainability and energy consumption during China’s new normal stage,Journal of Cleaner Production,Volume 273,2020,
（6）Antonio J. Mateo-Márquez, José M. González-González, Constancio Zamora-Ramírez, An international empirical study of greenwashing and voluntary carbon disclosure[J]. Journal of Cleaner Production, Volume 363, 2022, 132567, ISSN 0959-6526, https://doi.org/10.1016/j.jclepro.2022.132567.
（7） Jinxiu Ding, Zhe Lu, Chin-Hsien Yu, Environmental information disclosure and firms’ green innovation: Evidence from China[J]. International Review of Economics & Finance, Volume 81, 2022, Pages 147-159, ISSN 1059-0560, https://doi.org/10.1016/j.iref.2022.05.007.
（8）Yang, J.Y.; Roh, T. Open for Green Innovation: From the Perspective of Green Process and Green Consumer Innovation. Sustainability 2019, 11, 3234. https://doi.org/10.3390/su11123234.
（9）Fu Lili, Chen Yufeng, Xia Qing, Miao Jiafeng, Impact of Economic Policy Uncertainty on Carbon Emissions: Evidence at China’s City Level, Frontiers in Energy Research, volume 10, 2022, https://www.frontiersin.org/articles/10.3389/fenrg.2022.866217/full.
（10）Sellitto, M.A.; Camfield, C.G.; Buzuku, S. Green innovation and competitive advantages in a furniture industrial cluster: A survey and structural model. Sustain. Prod. Consump. 2020, 23, 94–104.
Secondly, you mentioned that “For the impact of Enterprise Green Innovation: why only use the Study on the Moderating Effect of Carbon Information Disclosure? not others, like mediating effect?” We dicussed in the text “The signal transmission idea states that the publication of carbon information is a signal transmission technique. Asymmetric information's negative consequences can be reduced through carbon information disclosure. According to Li Zhijun and Wang Shanping (2011), businesses with high-quality, standardized carbon information disclosure can ease their financial limitations by minimizing information asymmetry, thereby lessening the ad-verse impact of unclear economic policies on their green innovation. If enterprise green innovation and economic policy uncertainty are positively cor-related, when economic policy uncertainty is severe and the level of carbon disclosure is high, management should be more eager to convey the company's sound financial position and ability to resolve proxy conflicts to help the business to create a favorable internal and external environment that will encourage green innovation.” Therefore, we took experiments to verify its mediating effect. As for the study of mediating effects, in terms of our limited theoretical analysis and literature studies, they were not considered and studied. Thank you very much for this suggestion. We will take this into account in future in-depth research.
Thirdly, as for the English. We have used the MDPI‘s English editing service and get a high quality paper.
Above are my revisions and responses to the comments from the last review. Thank you again for your valuable suggestions, and we will continue to revise them if there are any deficiencies.
Looking forward to your reply！
Author Response File: 
Author Response.docx
Reviewer 2 Report
Dear Authors,
The paper is not enough supported by arguments and logical argumentation is missing in various sections.
Methodology is not clear enough, and in some respects it is incorrect. The proposed method for the measurement of Enterprise Green Innovation is not appropriate. What is the exact title of the paper by Kong Dongmin and Xu Mingli (2017)? It does not appear in the bibliography and it seems that the correct quotation is Mingli Xu, Gaowen Kong and Dongmin Kong (2017), which does not refer to green innovation. Besides, the chosen control variables are not relevant in totality.
In the introduction there is no mention of relevant literature on economic policy uncertainty (EPU). The concept of “new normal” should be better explained from the perspective of green innovation, “dual carbon goal”/“30-60 target” (see for instance Zhujun Jiang, Pinjie Lyu, Liang Ye, Yang Wenqian Zhou, Green innovation transformation, economic sustainability and energy consumption during China’s new normal stage, Journal of Cleaner Production, Volume 273, 2020, 123044, ISSN 0959-6526, https://doi.org/10.1016/j.jclepro.2020.123044).
It is mentioned that “According to academics, economic policy uncertainty has both positive and negative effects on enterprise green innovation”, but no examples are mentioned. See for instance:
Xin Cui, Chunfeng Wang, Ahmet Sensoy, Jing Liao, Xiaochen Xie, Economic policy uncertainty and green innovation: Evidence from China, Economic Modelling, Volume 118, 2023, 106104, ISSN 0264-9993, https://doi.org/10.1016/j.econmod.2022.106104.
Frequent economic policy adjustments lead to significant increases in economic policy uncertainty (EPU). Using a sample of Chinese A-share listed firms from 2005 to 2019, the authors find strong evidence that EPU is significantly and negatively associated with corporate green innovation. The moderating effect analysis shows that financial constraints exacerbate the negative impact of EPU on green innovation, while government environmental subsidies can significantly mitigate the negative EPU effect.
Yang, X.; Mao, S.; Sun, L.; Feng, C.; Xia, Y. The Effect of Economic Policy Uncertainty on Green Technology Innovation: Evidence from China’s Enterprises. Sustainability 2022, 14, 11522. https://doi.org/10.3390/su141811522.
In some cases, enterprise fears uncertainty more than the policy itself, and this fear can impede innovation. However, this study finds that uncertainty is the source of enterprise’s innovation. Authors took Chinese A-share listed companies from 2010 to 2018 as the research sample and studied the impact of economic policy uncertainty (EPU) on green technology innovation (GTI). Based on China’s EPU index and green patent-application data of Chinese-listed enterprises, this study adopted a panel fixed regression model and found that EPU has a slightly promoting effect on GTI of Chinese-listed enterprises. This effect is also affected by enterprise ownership and industry characteristics. Among them, EPU has a stronger promoting effect on GTI activities of state-owned enterprises and high-tech enterprises than common enterprises. In particular, if EPU increases, the GTI of high-polluting enterprises is not as great as the incentive effect of ordinary enterprises. The reasons may be that state-owned enterprises have more implicit capital guarantees, high-tech enterprises have higher innovation motivation, and high-polluting enterprises have stronger dependence on traditional production equipment. These results can provide a reference for the debate on “uncertainty.” The conclusions of this paper contain unique policy implications.
The literature review section is too short, besides no recent research is mentioned or commented.
Further reading:
Fu Lili, Chen Yufeng, Xia Qing, Miao Jiafeng, Impact of Economic Policy Uncertainty on Carbon Emissions: Evidence at China’s City Level, Frontiers in Energy Research, volume 10, 2022, https://www.frontiersin.org/articles/10.3389/fenrg.2022.866217/full.
Liang, H.; Li, G.; Zhang, W.; Chen, Z. The Impact of Green Innovation on Enterprise Performance: The Regulatory Role of Government Grants. Sustainability 2022, 14, 13550. https://doi.org/10.3390/su142013550.
Yang, J.Y.; Roh, T. Open for Green Innovation: From the Perspective of Green Process and Green Consumer Innovation. Sustainability 2019, 11, 3234. https://doi.org/10.3390/su11123234. Green innovation has increasingly become a collaborative effort
The concept of carbon information disclosure is incomplete, there is no mention of greenwashing. Voluntary corporate environmental disclosure has increased significantly in the last decade. However, the increase in environmental disclosure has also been accompanied by the social questioning of its veracity (see Antonio J. Mateo-Márquez, José M. González-González, Constancio Zamora-Ramírez, An international empirical study of greenwashing and voluntary carbon disclosure, Journal of Cleaner Production, Volume 363, 2022, 132567, ISSN 0959-6526, https://doi.org/10.1016/j.jclepro.2022.132567).
“The Climate-related Financial Information Disclosure Working Group (TCFD) and the Carbon Information Disclosure Project are two developed nations that have constructed rather complete carbon information disclosure systems over time (CDP)” -> what is meant by “two developed nations”?
Jinxiu Ding, Zhe Lu, Chin-Hsien Yu, Environmental information disclosure and firms’ green innovation: Evidence from China, International Review of Economics & Finance, Volume 81, 2022, Pages 147-159, ISSN 1059-0560, https://doi.org/10.1016/j.iref.2022.05.007.
To control pollution and improve the environment, China has implemented a series of environmental regulations, including command-and-control and market-based regulations. In recent years, the Chinese government has begun to pay more attention to information disclosure and framed regulations in this respect. On May 1, 2008, the “Measures on Open Environmental Information (Trial)” was made operational, which helped change the role of the Chinese regulator from traditional government-led environmental supervision to one encouraging information sharing and voluntary reductions. In 2008, two professional environmental non-governmental organizations, the Institute of Public and Environmental Affairs (IPE) and the Natural Resources Defense Council (NRDC), jointly published the pollution information transparency index (PITI) to evaluate the degree of pollution information transparency in 113 prefecture-level cities in China. The remaining cities are not included in the PITI list. A city in the PITI list is forced to release more information on pollution sources, the public in a PITI city will easily access to environmental information and have high environmental awareness and further participate in public action, thereby creating pressure for stricter regulations for the high-polluting industries and firms.
The definition of green innovation should be reformulated according to the literature, for example:
Xie Zhaodong, Wang Jianzhi, Zhao Guoqin, Impact of Green Innovation on Firm Value: Evidence From Listed Companies in China’s Heavy Pollution Industries, Frontiers in Energy Research, volume 9, 2022, https://www.frontiersin.org/articles/10.3389/fenrg.2021.806926.
Li L, Msaad H, Sun H, Tan MX, Lu Y, Lau AKW. Green Innovation and Business Sustainability: New Evidence from Energy Intensive Industry in China. Int J Environ Res Public Health. 2020 Oct 26;17(21):7826. doi: 10.3390/ijerph17217826. PMID: 33114610; PMCID: PMC7663660.
Aguilera-Caracuel, J., & Ortiz-de-Mandojana, N. (2013). Green Innovation and Financial Performance: An Institutional Approach. Organization & Environment, 26(4), 365–385. https://doi.org/10.1177/1086026613507931
Kesidou et al. (2012), Xu Shichun et al. (2012), Wang Zhenyu et al. (2012), Gu Qun and Zhai Shuping (2014), Spence (1974) etc. are not included in the bibliography.
The paper has many weaknesses and substantial revisions are required.
Author Response
Dear Reviewers:
Thanks a lot for your valuable suggestions for the essay The Impact of Economic Policy Uncertainty on Enterprise Green Innovation: A Study on the Moderating Effect of Carbon Information Disclosure. Our team has carefully studied your pertinent advice and take the time to read the relevant literature. We use the weekend to carefully revise and adjust. Meanwhile, through the MDPI‘s English editing service, the essay is polished and optimized. Next, I'll explain our revised responses to each of your suggestions. Also, all the revises I mentioned are annotated in the form of comments in the WORD. Convenient for you to review.
Firstly, you mentioned that “In the introduction there is no mention of relevant literature on economic policy uncertainty (EPU). The concept of “new normal” should be better explained from the perspective of green innovation”. We have added some details about EPU in the introduction. At the same time, it also added an introduction to the new normal. The literature sources refer to the literature you have given and other authoritative documents we find online.
“In 2014, Chinese President Xi Jinping presented the idea of a new normal economy during the Asia-Pacific Economic Cooperation (APEC) summit1. and high-energy-consuming industries. Under the new normal, the model focuses on four goals: service, innovation, equity, and sustainability (Yu,J,2019)2. China is under con-siderable stress to strengthen its economy and increase its productivity while also en-suring environmental sustainability. Therefore, the contradiction between economic growth, energy use, and environmental conservation is serious, which will threaten Chinese economic sustainability unless these aspects are addressed and balanced.”
Secondly，we take some example to explain ”According to academics, economic policy uncertainty has both positive and negative effects on enterprise green innovation”. It can be seen in the introduction part.
Xin Cui(2023) used a sample of Chinese A-share listed firms from 2005 to 2019 and found strong evidence that EPU is significantly and negatively associated with enterprise green innovation3. The results of the analysis of the moderating effects showed that government environmental subsidies can substantially mitigate the negative EPU effect on enterprise green innovation, whereas financial constraints exacerbate the negative impact of the EPU. Yang X. (2022) reported that uncertainty is the source of enterprise innovation and found that EPU has a slight promoting effect on the GTI of Chinese-listed enterprises by taking Chinese A-share listed companies from 2010 to 2018 as the study sample4. Enterprise ownership and industry characteristics can also affect the result. EPU has a stronger promoting effect on the GTI activities of state-owned and high-tech enterprises than on that of common enterprises. In particular, the GTI of high-polluting enterprises has a weaker incentive effect than that of ordinary enterprises when EPU is higher. This can be explained by state-owned enterprises having more implicit capital guarantees, whereas high-tech enterprises have stronger motivation to innovate, and the high-polluting en-terprises are more dependent on traditional production equipment.
Thirdly, the doubt about method for the measurement of Enterprise Green Innovation and the chosen of control variables. We have clarified the methodology used. We propose to use green innovation input (R&D investment) to measure enterprise green innovation, and conduct robustness testing through the number of green patents. This method has also been verified by relevant literature. We have listed the relevant literatures in the essay. Mainly from these literatures:
(1)WU Yuming, SHI Huan. The impact of environmental regulation on enterprise innovation under the background of dual carbon:An empirical study based on China's provincial panel data[J].Eco-Economy.2023-3(3):148-159.
(2) YANG Yang, WEI Jiang, LUO Laijun. Who is using government subsidies for innovation?—— the joint regulation effect of ownership and factor market distortion[J].Management World,2015(1):75-86+98+188.)
(3) CHEN Songyi. Construction and measurement of green innovation capability evaluation index system in high-tech industry[J].Management Decision.2023-3(32):174-179.)
(4) QING Tao. Intellectual Property Protection, Agglomeration Difference and Enterprise Innovation[J/OL].Economic Journal. https://doi.org/10.16513/j.cnki.cje.20230215.002.
(5) FAN Xiaoyang. Research on the impact of environmental information disclosure on enterprise innovation———Based on the regulatory effect of financialization[J].Journal of Luoyang Institute of Technology.2023-2(38):48-55.
As for the chosen of control variables. We made adjustments after referring to the following literature. Unrelated control variables such as equity concentration were deleted, and control variables such as foreign participation, regional conditions, and property rights were added.
- KONG Dongmin. Research on environmental regulation optimization of green technology innovation of Chinese enterprises under the goal of "dual carbon"[J].Taxation and Economy.2022(6):1-8.
- ZHANG Wanli. Research on the impact of economic agglomeration on green innovation of listed enterprises[J].Research of Technology Economics and Management.2023(2):67-73.
- LI Huiyun. Environmental, social and governance information disclosure and enterprise green innovation performance[J].Statistical Research.2022-12(39):46.
- WANG Xinhong,HU Shiwei. Carbon trading system, environmental attention of senior management team and green technology innovation[J].Journal of Xi'an University of Science and Technology.2023(1):217.
Fourthly, mentioned that ”The literature review section is too short, besides no recent research is mentioned or commented.” We increased the overall length of the literature review section. Added literature review on centerprisegreen innovation, EPU and carbon disclosure from scholar literatures which published in three years. Including but not limited to the following literatures：
（1）Xin Cui, Chunfeng Wang, Ahmet Sensoy, Jing Liao, Xiaochen Xie,Economic policy uncertainty and green innovation: Evidence from China, Economic Modelling,Volume 118,2023.
（2） Yang, X.; Mao, S.; Sun, L.; Feng, C.; Xia, Y. The Effect of Economic Policy Uncertainty on Green Technology Innovation: Evidence from China’s Enterprises. Sustainability 2022, 14, 11522. https://doi.org/10.3390/su141811522.
（3）Green innovation transformation, economic sustainability and energy consumption during China’s new normal stage,Journal of Cleaner Production,Volume 273,2020,
（4）Antonio J. Mateo-Márquez, José M. González-González, Constancio Zamora-Ramírez, An international empirical study of greenwashing and voluntary carbon disclosure[J]. Journal of Cleaner Production, Volume 363, 2022, 132567, ISSN 0959-6526, https://doi.org/10.1016/j.jclepro.2022.132567.
（5） Jinxiu Ding, Zhe Lu, Chin-Hsien Yu, Environmental information disclosure and firms’ green innovation: Evidence from China[J]. International Review of Economics & Finance, Volume 81, 2022, Pages 147-159, ISSN 1059-0560, https://doi.org/10.1016/j.iref.2022.05.007.
（6）Yang, J.Y.; Roh, T. Open for Green Innovation: From the Perspective of Green Process and Green Consumer Innovation. Sustainability 2019, 11, 3234. https://doi.org/10.3390/su11123234.
（7）Fu Lili, Chen Yufeng, Xia Qing, Miao Jiafeng, Impact of Economic Policy Uncertainty on Carbon Emissions: Evidence at China’s City Level, Frontiers in Energy Research, volume 10, 2022, https://www.frontiersin.org/articles/10.3389/fenrg.2022.866217/full.
（8）Sellitto, M.A.; Camfield, C.G.; Buzuku, S. Green innovation and competitive advantages in a furniture industrial cluster: A survey and structural model. Sustain. Prod. Consump. 2020, 23, 94–104.
（9）WANG Xinhong,HU Shiwei. Carbon trading system, environmental attention of senior management team and green technology innovation[J].Journal of Xi'an University of Science and Technology.2023(1):217.
（10）AKRONS, DEMIR E, JMD ESTEBAN, et al. Economic Policy Uncertainty and Corporate Investment: Evidence from the U.S. Hospitality Industry[J]. Tourism Management,2020,77(6):104-119.
（11）DEJUAN-BITRIA D, GHIRELLI C. Economic Policy Uncertainty and Investment in Spain[J]. Journal of the Spanish Economic Association, 2021,58(5):1-38.
（12）WU ZHANG, ZHANG ZOU. The Economic Policy Uncertainty and Firm Investment in Australia[J]. Applied Economics,2020,52(31):1-25.
Fifthly，The concept of carbon information disclosure is incomplete. We added some relevant literatures to enrich the concept of carbon information disclosure.
Since the early 2010s, the number of enterprises that voluntarily disclose their envi-ronmental information has substantially increased. However, the increase in environ-mental disclosure has also been accompanied by social doubts about the veracity of the information. In many nations, the level of information disclosure by listed companies has long been the center of attention. The United States and other developed countries have successively established relatively complete carbon information disclosure regulations, including The Climate-related Financial Information Disclosure Working Group (TCFD) and the Carbon Information Disclosure Project (CDP)15. However, China's system for disclosing carbon information was implemented later and was largely based on the CDP. To control pollution and improve the environment, China has implemented a series of environmental regulations, including command-and-control and market-based regula-tions. In recent years, the Chinese government has begun to pay more attention to in-formation disclosure and framed regulations in this respect. On May 1, 2008, the Measures on Open Environmental Information (Trial) were made operational, which helped change the role of the Chinese regulators from traditional government-led environmental su-pervision to that encouraging information sharing and voluntary reductions. In 2008, two professional environmental non-governmental organizations, the Institute of Public and Environmental Affairs (IPE) and the Natural Resources Defense Council (NRDC), jointly published the pollution information transparency index (PITI) to evaluate the degree of pollution information transparency in 113 prefecture-level cities in China. The remaining cities were not included in the PITI list. A city on the PITI list must release more infor-mation on pollution sources; the public in a PITI city can easily access environmental information, have high environmental awareness, and further participate in public action, thereby creating pressure for stricter regulations for high-polluting industries and firms.
Sixthly，about the definition of green innovation should be reformulated. We give relevant definitions after referring to the latest literature in the Literature Review part.
“We defined green enterprise innovation as a motivation for green growth, which is key to controlling the worsening of eco-environmental degradation and guaranteeing the sustained growth of a company's economy activities. Green innovation consists of green product innovation and green process innovation. Environmental rules and corporate governance impact green innovation, with a number of competitive benefits and improved commercial viability. Among the drivers of green innovation are environmental rules, technical competence, management environment care, competition constraints, and customer demand for green products.”
Seventhly, about the bibliography. We updated our bibliography. Some inappropriate citations and references were removed and some of the most recent references were added. At the same time, it corresponds to each other.
Above are my revisions and responses to the comments from the last review. Thank you again for your valuable suggestions, and we will continue to revise them if there are any deficiencies.
Looking forward to your reply！
Author Response File: Author Response.docx
Round 2
Reviewer 2 Report
Dear Authors,
Thank you for the revised version of your manuscript. This is an improved version of your paper and therefore I recommend the publication. Please read it carefully once again in order to be sure that punctuation, spaces, grammar are ok.
All the best.
Author Response
Dear Editors:
Thanks a lot for your valuable suggestions for the essay The Impact of Economic Policy Uncertainty on Enterprise Green Innovation: A Study on the Moderating Effect of Carbon Information Disclosure.
We have ued the MDPI‘s English editing service, made the language more fluently. And we have sorted out the full text especially for the punctuation, spaces and grammar to make sure it is okay.
Thank you again for your valuable suggestions, and we will continue to revise them if there are any deficiencies.
Looking forward to your reply！
Author Response File: Author Response.docx
