Impact of Climate Change on Green Technology Innovation—An Examination Based on Microfirm Data

Abstract

Against the pressing backdrop of global climate change, various environmental issues are becoming increasingly prominent, posing unprecedented challenges to both the global economic system and business operations. Green technology innovation, as a critical response to climate change, is vital not only for the sustainable development of firms, but also for fostering the harmonious coexistence of the economy and environment. However, whether climate change itself affects green technology innovation activities is still a topic that needs to be explored in depth. This paper utilizes data from the China Meteorological Administration (CMA), State Intellectual Property Office of China (SIPO), and CRNDS database to empirically examine the impact of climate change on green technology innovation of Chinese A-share listed firms from 2011 to 2020. The findings indicate the following: (1) Climate change significantly inhibits green technology innovation. (2) Entrepreneurs’ green human capital can mitigate the negative impact of climate change on green technology innovation. (3) When faced with higher investor attention or stronger environmental regulation, firms will pay more attention to their green technology innovation when adversely affected by climate change. (4) Resource-based cities show greater resilience against the negative impacts of climate change on green technology innovation compared to non-resource-based cities, suggesting that climate change-induced adaptive behavior may break the resource curse. (5) Mature, non-polluting, high-tech, and non-manufacturing firms are more effective in resisting the inhibitory effects. This research contributes to understanding climate risks and managing them effectively.

1. Introduction

Among the many challenges facing the world today, climate change poses a severe threat to ecosystems and economic systems, making it one of the most urgent and far-reaching issues [1]. Accelerated industrialization and expanding human activities have led to massive greenhouse gas (GHG) emissions, particularly carbon dioxide (CO₂), creating an invisible “greenhouse” around the Earth. This effect has resulted in a continuous increase in global temperatures, triggering unprecedented climate change. Such changes disrupt the delicate balance of nature and threaten the economy, ecology, and even human survival. As global environmental awareness grows and international consensus on reducing GHG emissions strengthens, green technology innovation is becoming a crucial strategy for firms to drive transformation, upgrade processes, and achieve sustainable development, effectively addressing the challenges of climate change.

In this context, it is particularly urgent to analyze the impact of climate change on firms’ green technological innovation. Related studies have mostly relied on macro data to describe the green technological innovation of the whole economy or industry in a general way. However, microfirm data as an entry point have more unique advantages than macro data. Microfirm data can record the specific behaviors, strategies, effectiveness, and individual differences faced by firms in green technology innovation, thus revealing more details and dynamics of innovation at the firm level. By analyzing these microdata, we can more accurately understand how climate change affects firms’ green technology innovation decisions and processes, as well as the differences in innovation strategies and effectiveness of different firms in addressing climate change challenges. This provides policymakers and firm decision-makers with more precise and targeted information to help promote the development of green technology innovation and the sustainable development of firms in the context of climate change.

Current academic research on climate change largely focuses on its risks and coping strategies. At the macro level, climate change threatens national economic growth by reducing productivity and incomes [2,3]. It also induces demographic shifts, GDP losses, risk-averse behavior, and changes in savings patterns, which significantly influence monetary policy adjustments and sustainable financial policy formulation [4,5,6].

At the meso level, the impacts of climate change on agriculture, manufacturing, and other industries have become prominent research topics. These impacts are widespread, influencing the earnings of more than 40% of industries beyond agriculture, Notably, the outcomes of climate impacts are mixed—some industries suffer from climate shocks while others benefit [7]. Numerous studies show that climate change reduces arable land, discourages cultivation, and diminishes agricultural returns, with regional differences in adaptation and impacts [8,9,10]. In the manufacturing sector, higher spring temperatures positively affect output, while higher summer temperatures negatively affect it, with optimal output at 21–24 °C, beyond which output decreases sharply [11]. Additionally, there is an inverted U-shape relationship between temperature and total factor productivity in the manufacturing sector. Without further adaptation measures, climate change could reduce China’s manufacturing output by 12% per year by the mid-21st century [12]. Climate change also affects sectors like tourism and finance, prompting analyses of industry-specific impacts and adaptation strategies [13,14].

At the micro level, climate change affects individuals’ migration decisions, educational attainment, and health, leading to increased mortality, morbidity, and hospitalizations. These health impacts strain public health insurance and reduce labor productivity [15,16,17,18,19]. In recent years, the intensified impacts of climate change have significantly penetrated the real economy, posing severe threats to business production and operations. Climate change disrupts production processes, undermines operational stability, and raises financing and operational costs, reducing firm investment efficiency. This impact erodes market value and increases default risks, challenging the long-term sustainability of firms [20,21,22,23,24,25].

Research on green technology innovation primarily focuses on influencing factors. At the macro policy level, external pressure mechanisms significantly influence firms’ environmental investments, which in turn affects their green technology innovation strategy. Most studies suggest that environmental policies positively promote green technological innovation. For instance, environmental taxes incentivize firms to increase R&D investment, enhance innovative human capital, and alleviate financing constraints, thereby fostering green technological advancements [26]. Similarly, central environmental inspections encourage firms to improve fossil energy efficiency and reduce pollutant emissions, ultimately advancing green technological innovation [27].

However, some scholars argue that environmental policies may, under certain conditions, increase operational costs and inhibit green innovation. For example, carbon subsidies only motivate greater green investment compared to carbon taxes or hybrid policies if demand uncertainty is high; otherwise, subsidies can weaken incentives for green innovation [28,29]. Environmental regulations exhibit a U-shaped effect, initially inhibiting but eventually promoting green technology innovation [30].

At the firm level, numerous studies conclude that management characteristics significantly impact green technological innovation. Responsible leadership and an ethical firm culture contribute to green innovation [31], and managerial’ environmental awareness is often cited as a key driver of green technological innovation [32,33].

However, some studies indicate that managers’ social responsibility, innovative spirit, and risk-taking spirit are positively correlated with firm green technological innovation, while environmental awareness alone may not always lead to positive environmental behaviors due to social context variations [34,35]. In China, firms’ environmental awareness remains low, with limited emphasis on environmental protection and pollution control. Consequently, firms tend to adopt low-cost, high-risk pollution control measures rather than engaging in green innovation, which is perceived as a high-risk strategy [36]. As climate change becomes more pressing, consumer and investor environmental consciousness provides firms with market incentives for green technological innovations. Media also plays a crucial role in fostering green innovation. Studies show that media pressure can influence internal firm governance to encourage green innovation. Furthermore, a fair and impartial media environment enables public oversight, effectively replacing governmental regulation and promoting innovation through tripartite cooperation [37,38].

In summary, most of the existing literature on climate change explores its impacts on socioeconomic and ecological systems at different levels, such as macroeconomics, meso-industry or micro-individuals, while in the field of firm green technological innovation, it focuses more on how the macro-policy environment and the internal characteristics of the firm affect its innovation behavior. At present, there is still a lack of research in the literature that directly explores the impact of climate change on firms’ green technological innovation, but a large number of studies indirectly indicate that there is a potential link between the two. Specifically, climate change has a significant impact on the resource allocation strategies and strategic decisions of firms, first and foremost through the deterioration of their production and business environments. Under the increasingly severe situation of climate change, firms are faced with increased risks of frequent natural disasters and resource constraints, which force them to prioritize the use of scarce resources to meet immediate survival challenges, thus weakening their willingness and ability to invest in green technological innovations and indirectly constraining their green technological innovation activities.

Further, environmental regulatory policies triggered by climate change constitute another important source of pressure on firms’ external environment. On the one hand, these policies may lead to higher operating costs for firms in terms of energy use, emission standards, etc., and exacerbate their financing constraints, especially in those industries that are more affected by environmental policies. This additional economic burden may become a major obstacle for firms to promote green technological innovation, limiting their ability and motivation to invest in innovation. On the other hand, with the increase in environmental regulations and public awareness of environmental protection, firms are facing external supervisory pressure from government regulation, social opinion, and market demand. In order to maintain their social image, meet market demand for green products, and effectively avoid potential compliance and legal risks, firms may take the initiative to increase their investment in green technology innovation as a positive response to environmental protection requirements and to demonstrate their social responsibility and contribution.

In combating climate change, different countries and regions have taken distinctive measures. For example, the United States has promoted the development of clean energy through legislation such as the Clean Power Act, while California has taken the lead in implementing stringent carbon emission limits and promoting electric vehicles and green buildings. Germany, as a key member of the European Union, is actively promoting renewable energy and plans to phase out coal power generation and promote greening through its “energy transition” strategy. China has been an active participant in global climate change action and plays an important role in the United Nations Framework Convention on Climate Change and the Paris Agreement. To promote the energy transition in developing countries, China has proposed a “dual carbon target”, and on 16 July 2021, it officially opened a national carbon emissions trading market. All three have set clear emissions reduction targets and are promoting renewable energy, while strengthening regulation of carbon emissions to promote a green transition. However, the U.S. may have political differences in addressing climate change, which may affect policy implementation; the European Union (EU) focuses on overall synergy and legislative promotion, while China emphasizes practical exploration and policy innovation to achieve green transformation through pilot demonstration and gradual promotion.

We chose China as our research sample because it is one of the most seriously affected countries in the world in terms of natural disasters, with a large variety of disasters, a wide geographical distribution, a high frequency of occurrence, and heavy losses. This makes China face more severe challenges and have more urgent needs in addressing climate change. At the same time, China’s rich policies and practices in climate governance not only support its own green development but also provide valuable experience for the world; in addition, as one of the world’s largest developing countries and carbon emitters, China’s climate policies and actions have a significant impact on global climate governance, and its active participation and contribution are crucial to promoting the global climate change response process and cooperation.

This paper selects A-share listed firms in China between 2011 and 2020 as the research object and empirically analyzes how climate change affects the green technology innovation activities of firms. This study finds that (1) climate change has a significant dampening effect on firms’ green technology innovation, and this finding remains robust after adjusting for key variables and changing the sample scope and endogeneity treatment. (2) Entrepreneurs’ green human capital can serve as a mitigating factor to reduce the negative impact of climate change on firms’ green technology innovation. And this effect is more pronounced in small-scale and heavily polluting firms. (3) When firms face higher levels of investor attention or stricter environmental regulation, they will pay more attention to and promote green technological innovation under the challenges posed by climate change. (4) Compared with non-resource cities, resource cities show a greater ability to withstand the negative impacts of climate change on firms’ green technological innovations, which may imply that climate change-prompted adaptation strategies can help break the resource curse. (5) Mature firms, non-heavily polluting firms, high-tech firms, and non-manufacturing firms show greater efficiency and effectiveness in coping with the inhibiting effects of climate change on firms’ green technological innovation.

The marginal contributions of this paper are mainly in the following areas:

Firstly, this paper examines the impact of climate change on firm behavior at the micro level, thereby expanding the research scope of climate change. Most existing studies focus on the macroeconomic impacts of climate change, such as the economic growth model and industrial structure change, while relatively few address the micro-level effects on firms. By combining theoretical modeling with empirical analysis, this paper explores in detail how climate change affects green technological innovation through both physical risks and transformation risks. This study not only enriches the literature on the microeconomic impacts of climate change but also provides new perspectives and evidence on the strategic choices and behaviors of firms facing global environmental challenges.

Secondly, this paper further enriches the analysis of factors influencing green technology innovation from the perspective of external environment. Previous research primarily focused on internal factors such as resources, organizational structure, and firm culture. In contrast, this paper emphasizes the critical role of the external environment—specifically, the global event of climate change—on green technology innovation in firms. By systematically examining how transformation risks and physical risks associated with climate change affect the green innovation decisions and behaviors of firms, this study introduces new variables and dimensions to the analysis of green innovation influencing factors. Furthermore, it provides theoretical guidance and practical insights on how to identify and leverage opportunities for green technology innovation effectively in a complex, dynamic external environment. At the same time, it also offers valuable insights for policymakers on guiding and incentivizing firms to enhance green technological innovation through policy instruments, thereby addressing climate change and promoting a green economic transition.

Thirdly, this paper reveals the impact of climate change on green technological innovation from the perspective of entrepreneurs’ green human capital, which not only enriches and supplements the existing theoretical framework but also provides a powerful guide to firm practice. This paper emphasizes the central role of entrepreneurs’ personal characteristics and environmental knowledge in promoting the green transformation of firms and explores an innovative path that is both consistent with their own reality and forward-looking for firms in the process of responding to the challenges of climate change and realizing the goal of sustainable development. It not only provides policymakers with policy suggestions to incentivize entrepreneurs to accumulate green human capital but also provides practical references for firms to find new growth points in green technology innovation.

Fourthly, this paper analyzes the profound impact of climate change on firms’ green technological innovation behavior from the unique perspective of external monitoring pressure, which not only enriches the theoretical framework in the area of the relationship between climate change and firms’ technological innovation but also provides new insights into the dynamics of firms’ green transformation. Specifically, we carefully distinguish and analyze two key types of external monitoring pressures faced by firms: first, investor attention from the capital market, which reflects the market’s direct concern about firms’ environmental performance and sustainability; and second, the intensity of urban environmental regulations at the governmental level, which, as a concrete manifestation of the policy orientation, directly constrains and incentivizes the firms’ environmental protection behaviors and green technology adoption. By comparing the behavior of firms under different levels of investor concern and intensity of environmental regulation, we find that these external factors constitute an indispensable force in driving firms’ green technology innovation. The external monitoring pressure mechanism revealed in this paper not only demonstrates the complex motivation of green technological innovation in the context of climate change but also emphasizes that the combination of market mechanism and policy guidance can effectively stimulate the intrinsic innovation vitality of firms and promote the transformation of the whole industry and even the economy to a greener and more sustainable development path.

2. Theoretical Analysis and Research Hypothesis

In recent years, global climate change has accelerated significantly, with an increase in extreme weather events such as heavy rainfall, heatwaves, cold spells, strong winds, and droughts. This trend, particularly intensified by global warming, not only threatens the stability of natural ecosystems but also results in considerable socioeconomic losses. Notably, economic damages from extreme weather events account for 93% of the total losses from natural disasters [39,40]. As these adverse impacts increasingly affect the real economy, this paper hypothesizes that climate change has a detrimental effect on firm green technology innovation in terms of both physical and transformational risks.

2.1. Physical Risks and Green Technology Innovation

Physical risks refer to the economic costs and financial losses arising from extreme weather events and long-term climate changes. Firstly, physical risks impact green technology innovation through increased costs. Climate change directly damages production facilities, warehouses, and infrastructure, causing disruptions in production lines, inventory loss, and heightened repair costs. Additionally, climate change affects the stability of raw material supply; for instance, droughts reduce crop yields, disrupting supply chains in sectors such as food and textiles. This instability in the supply chain and damage to production infrastructure not only raises operating costs but also hampers firms’ daily operations and market competitiveness [41,42,43].

Secondly, physical risks reduce green technology innovation by lowering labor productivity. Rising global temperatures lead to more frequent extreme heat, posing serious risks to workers in outdoor and high-temperature environments. High heat exposure increases the risk of occupational diseases such as heat stroke, reducing productivity and increasing sick leave. Additionally, health issues like respiratory diseases and allergies caused by pollution and extreme weather further reduce labor productivity, restricting the long-term sustainable development and competitiveness of firms [44].

Thirdly, physical risks trigger systemic financial risks, which further hinder green technology innovation. Extreme weather events and natural disasters may result in insurance claims that exceed insurers’ capacity, leading to instability in the insurance market. Financial institutions, including banks, also face increased default risks as climate change affects borrower firms, raising non-performing loan ratios and shrinking asset values. The accumulation of these financial risks can threaten overall financial stability [45]. In response, financial institutions may increase lending rates and tighten credit policies, thereby raising the cost of firm finance [46,47].

Faced with climate-induced losses, firms often reallocate resources, shifting investments from core production activities to areas with lower costs and technological thresholds to alleviate financial pressures in the short term [48]. Consequently, green technology innovation, which involves high costs, high risks, and long time frames, becomes a lower priority. While this resource reallocation may temporarily ease financial burdens, it ultimately inhibits firms’ capacity for innovation and long-term competitiveness on a sustainable development path.

2.2. Transformational Risks and Green Technology Innovation

Transformational risks refer to uncertainties arising from policy changes, technological advancements, and shifts in market preferences during the low-carbon transition. Firstly, transformational risks impact green technology innovation through cost effects. From a static economic perspective, environmental policies increase compliance costs for firms, including pollution treatment, energy efficiency improvements, and the adoption of green production technologies. Under cost pressure, firms may prioritize short-term profitability over green technology innovation, which is high-risk and involves long payback cycles, thereby inhibiting their incentives to innovate [49,50,51,52,53].

Secondly, transformational risks affect green technology innovation through scale effects. Rising costs from environmental regulations can make it difficult for firms to maintain their market share and profit margins, forcing measures such as downsizing, layoffs, and salary cuts to cope with financial pressures [41,54,55]. The resulting reduction in production scale limits firms’ R&D investment and market expansion capabilities, leading to a negative scale effect on green innovation.

Thirdly, transformational risks impact green technology innovation through the crowding-out effect. Environmental regulations internalize the externalities of firm pollution, creating additional costs and squeezing funds available for green innovation [56,57]. This cost-shifting mechanism forces firms to make difficult resource allocation choices, reducing green innovation investments to maintain short-term financial stability.

Finally, transformational risks affect green technology innovation by triggering systemic financial risks. The uncertainty of climate change threatens financial market stability, where asset price volatility is influenced by market expectations and risk appetite. The complexity and unpredictability of climate change further increase uncertainty, potentially disrupting market pricing mechanisms [58,59,60]. This instability elevates financial market risk, impacting firms through channels such as credit crunches and decreased investor confidence, further inhibiting green technology innovation [61,62,63].

Therefore, based on the above analysis, this paper proposes the following:

Hypothesis 1.

Climate change is detrimental to firm green technology innovation.

2.3. Entrepreneurs’ Green Human Capital and Green Technology Innovation

Green knowledge, defined as a deep understanding of environmental problems and the ability to precisely address them [64,65], is fundamental to green technological innovation. Entrepreneurs’ green human capital plays a significant role in acquiring and managing green knowledge, ultimately enhancing the firm’s environmental performance [66]. Entrepreneurial green human capital plays a key role in reshaping firm behavior. Equipped with extensive green knowledge and strong environmental awareness, entrepreneurs can integrate environmental considerations into management decisions, promoting environmentally friendly production methods and business models. This endogenous change not only increases the willingness and effectiveness of firms to engage in green innovation but also provides a strong guarantee that firms will realize win–win economic and environmental benefits [67].

Therefore, based on the above analysis, this paper proposes the following:

Hypothesis 2.

Entrepreneurs’ green human capital positively moderates the adverse effects of climate change on green technology innovation.

3. Data and Research Methods

3.1. Empirical Model

Since many of the observations in the patent data sample are zero, the negative binomial regression or Poisson regression is appropriate in this paper. However, the variance in firm green technology innovation (GTI) is larger than the mean, and there is “over-dispersion”, which violates the assumptions of Poisson regression model. Therefore, this paper employs a negative binomial regression to test the hypothesis. The specific model is as follows:

$$GI{T}_{i,t}={\beta }_0+{\beta }_{1}Tem{p}_{i,t}+\alpha Control{s}_{i,t}+{\mu }_i+{\lambda }_t+{\epsilon }_{i,t}$$

(1)

where i is the firm, t is the time, the explanatory variable denotes the number of green technology innovations of firm i in period t, and the core explanatory variable denotes the temperature deviation of the city where firm i is located in period t, and is a series of control variables, including climate and climate-linked dimensions. ${\mu }_i$ and ${\lambda }_t$ denote industry-fixed effects and year-fixed effects, respectively. ${\epsilon }_{i,t}$ denotes the random error term.

3.2. Variable Description

3.2.1. Explained Variable

A green patent is the final result of green technology innovation, which directly reflects the level of green technology innovation of firms. Generally speaking, it takes 2 to 3 years from application to authorization, so this paper adopts the number of firm green patent applications plus 1 and takes the logarithm as the proxy variable of firm green innovation, which is denoted by $GI{T}_{i,t}$. This is indicated by the number of green patents applied by a firm plus one and taking the logarithm.

3.2.2. Explanatory Variable

Currently, the International Meteorological Organization measures climate change mainly through indicators such as temperature, precipitation, hours of sunshine, sea level rise, and changes in greenhouse gas concentrations. Among these indicators, temperature changes are the most easily observed and perceived.

Therefore, this study chooses temperature change as a proxy for climate change. Specifically, this paper uses the deviation of the annual average temperature of the city where the firm is located to measure climate change, i.e., the degree of deviation of each city’s annual average temperature from its long-term average temperature.

3.2.3. Moderator Variable

We constructed the variable “Green” to represent entrepreneurs’ green human capital by manually extracting the environment-related education and work experience of entrepreneurs from Chinese A-share listed firms. Specifically, text analysis was used to screen entrepreneurs’ CVs in the CSMAR database. If the CV contained keywords such as “regeneration”, “sustainable”, “energy saving”, “environmental protection”, “pollution prevention”, “environment “ecology”, “low carbon”, “clean energy”, “new energy”, or “green”, it was considered indicative of green human capital and assigned a value of 1. Missing data were supplemented by extracting environment-related information from official firm websites or Sina Finance using Python.

3.2.4. Control Variables

In addition to temperature, firm green technology innovation is also affected by other factors, so this paper introduces two levels of control variables: other climate variables of the city where the firm is located and firm-specific characteristics variables. Climate-level control variables include precipitation, relative humidity, average air pressure, and sunshine. Firm-level control variables are based on operating conditions and management characteristics, specifically including the proportion of shares held by the largest shareholder (Top1), cashflow ratio (Cashflow), gearing ratio (Lev), equity multiplier (EM), equity ratio (DER), net profit margin on total assets (ROA), and gross profit margin on sales (GrossProfit).

Table 1. Definition and description of main variables.

Variable	Definition	Symbol	Calculation Method
Explained variable	Green technical innovation	GTI	EnvrInvPat + EnvrUtyPat + 1 (logarithmic)
Explanatory variable	Temperature difference	Temp	Average annual temperature where business operates subtract absolute value of long-term average temperature
Moderator variable	Green human resources	Green	Entrepreneurs with an environmentally friendly background assign a value of 1, and vice versa 0
Climate Controls	Sunshine duration	Sunshine	Number of sunshine hours in the city where the firm is located (logarithmic); unit: hours
	Precipitation	Precipitation	The amount of precipitation (logarithmic) in the city where the firm is located; unit: mm
	Relative humidity	Humidity	Relative humidity (logarithmic) in the city where the firm is located; unit: %
	Average air pressure	Pressure	Average air pressure (logarithmic) in the city where the firm is located; unit: KPa
Company Controls	Shareholding ratio of the controlling shareholder	Top1	The largest Shareholder Holdings/Total Shares
	Cash flow ratio	Cashflow	Net cash flow from operating activities/Total assets
	Debt asset ratio	Lev	Total liabilities at the end/Total assets at the end
	Equity multiplier	EM	Total assets at the end/Owner’s equity at the end
	Equity ratio	DER	Total liabilities at the end/Owner’s equity at the end
	Return on assets	ROA	Net profit/Average balance of total assets
	Gross profit margin	GrossProfit	(Operating Income-Operating Costs)/Operating Income

provides definitions of these variables.

3.3. Data Sources and Descriptive Statistics

The research sample of this paper is Chinese A-share listed firms from 2011 to 2020. firms with ST, *ST, PT warnings, financial firms, and those with severely missing data were excluded; a 1% winsorization was applied to mitigate the negative impact of outliers on the estimation results.

The green patent data were sourced from the State Intellectual Property Office (SIPO) and filtered based on the WIPO green patent classification numbers. Climate-level data were obtained from the China Meteorological Administration (CMA), including detailed geographic coordinates of weather stations and affiliated city information. For weather stations with missing city data, geographic coordinates were used via Google Maps to determine the affiliated city, followed by retrieving the corresponding meteorological data. Firm-level control variables were collected from the CRNDS, CCER, and Wind database.

Table 2. Descriptive statistics.

VarName	Obs	Mean	SD	Min	Max
GTI	23,249	0.318	0.738	0.000	5.677
Temp	23,249	0.686	0.398	0.001	2.394
Green	23,249	0.081	0.273	0.000	1.000
Sunshine	23,249	7.546	0.234	6.602	8.130
Precipitation	23,249	6.975	0.556	3.258	7.941
Humidity	23,249	4.250	0.143	3.591	4.486
Pressure	23,249	6.894	0.055	6.432	6.925
Top1	23,249	0.344	0.150	0.083	0.758
Cashflow	23,249	0.046	0.068	−0.199	0.257
Lev	23,249	0.429	0.207	0.032	0.908
EM1	23,249	2.137	1.283	1.033	10.856
DER	23,249	1.137	1.283	0.033	9.856
ROA1	23,249	0.039	0.064	−0.373	0.237
GrossProfit	23,249	0.292	0.176	−0.039	0.912

reports the descriptive statistical of the relevant variables.

4. Results of Empirical Analysis

4.1. Baseline Regression Results

Table 3. Benchmark regression results.

	(1)	(2)	(3)
	GTI	GTI	GTI
Temp	−0.130 **	−0.161 ***	−0.147 ***
	(0.044)	(0.045)	(0.044)
Climate controls		Yes	Yes
Company controls			Yes
Year	Yes	Yes	Yes
Industry	Yes	Yes	Yes
_cons	−2.369 ***	−11.470 ***	−6.216
	(0.193)	(2.701)	(23.950)
N	23,249	23,249	23,249

Note: Significance at the 1% and 5% level is indicated by *** and **, respectively.

presents the baseline regression results of climate change’s impact on green technological innovation. Column (1) indicates the regression results without introducing any control variables, with a negative coefficient. Columns (2) and (3) indicate the regression results after gradually adding climate-level control variables and firm-level control variables. The regression results after adding all control variables are shown in Column (3): the coefficient of climate change is −0.147, which is significantly negative at 1% level, indicating that for every unit deviation of temperature deviation, the average number of times that the firm carries out green technological innovation will be reduced by 0.147%, and climate change has a negative impact on the green technological innovation of the firm, which supports Hypothesis 1 of this paper.

The studies mentioned above show that climate change has a negative impact on the sustainability of firms. Specifically, climate change can damage production facilities and the business environment of firms, reduce labor productivity and investor confidence, and exacerbate market uncertainty. At the same time, climate change triggers systemic financial risks that threaten the stability of financial markets and increase the cost of business operations and financing. Under economic and environmental pressures, firms may prioritize short-term survival challenges, such as making urgent adjustments to resource deployment and risk management strategies, which may alleviate the current crisis but squeeze investment in green technologies.

This runs counter to several United Nations Sustainable Development Goals (SDGs). For example, it directly impacts SDG 9 (industry, innovation, and infrastructure), as reduced firm investment in green technologies can inhibit technological innovation and industrial upgrading, thereby slowing the transition to sustainable industrialization. At the same time, it also conflicts with SDG 11 (sustainable cities and communities) because firms sacrificing green investments for short-term survival may exacerbate environmental pollution and resource depletion in cities, which is not conducive to the construction of green, low-carbon, and resilient urban ecosystems. Therefore, combating climate change and promoting green technological innovation is an indispensable part of realizing the SDGs.

4.2. Robustness Test

4.2.1. Replacement of Core Explanatory Variables

Climate change has a particular lagged impact. It is a long-term and complex process, with non-instantaneous effects on the economy, ecology, and firm behavior, but with lagged effects. For example, temperature change first affects agricultural production, and then is transmitted to the firm level, affecting its cost, demand, etc., and ultimately driving the firm’s green technology innovation. This process may span multiple periods, so it is crucial to consider the lagged nature of climate change in the robustness test.

In addition, replacing the core explanatory variables with the lagged period of temperature deviation can avoid the endogeneity problem to a certain extent. The lagged temperature deviation is not affected by the dependent variable in the current period, which helps to alleviate the endogeneity caused by two-way causality and enhance the model robustness.

Therefore, this paper replaces the core explanatory variables with the lagged period of temperature deviation and then conducts the regression, and the regression results are shown in column (1) of

Table 4. Robustness test.

	(1)	(2)	(3)
	GTI	GTI	GTI-Grants
L. Temp	−0.179 **
	(0.063)
Temp		−0.144 **	−0.154 ***
		(0.048)	(0.034)
Climate controls	Yes	Yes	Yes
Company controls	Yes	Yes	Yes
Year	Yes	Yes	Yes
Industry	Yes	Yes	Yes
_cons	−6.102	−6.127	−3.792
	(24.008)	(23.983)	(11.980)
N	23,248	21,454	23,249

Note: Significance at the 1% and 5% level is indicated by *** and **, respectively.

, and the conclusion that climate change significantly inhibits firms’ green technological innovation remains robust and credible.

4.2.2. Changing the Sample Size

Newly listed firms are often susceptible to abnormal operational fluctuations due to external events, making the sample potentially unrepresentative. Therefore, firms with a listing age of less than three years were excluded, and the regression was re-run. The results, shown in column (2) of Table 4, indicate that the estimated coefficient of temperature (Temp) remains significantly negative, reaffirming that climate change inhibits firms’ green technology innovation.

4.2.3. Substitution of Explanatory Variables

This paper also uses the number of green patents granted in a given year as a proxy for the explanatory variable. The natural logarithm of the number of green patents (plus one) is used for regression. The regression results are shown in column (3) of Table 4, and the coefficients remain significantly negative, further supporting the robustness of the baseline regression results.

4.2.4. Endogenous Analysis

Considering that there is a reverse causal relationship between climate change and firm green innovation, we selected the annual industry average (IV) of temperature deviation of other firms in the same industry as the instrumental variable for temperature deviation for the regression. The regression results are shown in

Table 5. Endogenous analysis.

	(1)	(2)
	Temp	GTI
IV	0.861 ***
	(45.613)
Temp		−0.329 **
		(1.992)
Climate controls	Yes	Yes
Company controls	Yes	Yes
Year	Yes	Yes
Industry	Yes	Yes
F-test	219.763
_cons	0.211	−6.134
	(0.863)	(23.941)
N	23,249	23,249

Note: Significance at the 1% and 5% level is indicated by *** and **, respectively.

, where the Wald test F-statistic is greater than 10, indicating that there is no weak instrumental variable problem, while the Temp coefficient is significantly negative, again indicating that climate change inhibits firm green innovation.

4.3. Moderating Effects Analysis

The previous analysis indicated that climate change significantly inhibits firm green technology innovation. Entrepreneurs’ green human capital can effectively alleviate the contradiction between the firms’ environmental responsibility and profit-seeking goals, fostering green transformation and technological innovation. Therefore, this paper next further analyzes the moderating effect of entrepreneurs’ green human capital on this relationship. The following econometric model is constructed:

$$GI{T}_{i,t}={\beta }_0+{\beta }_{1}Tem{p}_{i,t}+{\beta }_{2}Gree{n}_{i,t}+{\beta }_{3}Tem{p}_{i,t}\times Gree{n}_{i,t}+\alpha Control{s}_{i,t}+{\mu }_i+{\lambda }_t+{\epsilon }_{i,t}$$

(2)

where $Gree{n}_{i,t}$ represents the moderator variables and $Tem{p}_{i,t}\times Gree{n}_{i,t}$ represents the interaction term between the core explanatory variables and the moderator variables, and the regression results are shown in column (2) of

Table 6. Moderation effects.

	(1)	(2)	(3)
Temp	−0.147 ***	−0.134 **	−0.092 *
	(0.044)	(0.044)	(0.046)
	(0.430)	(0.430)	(0.430)
Green		0.307 ***	0.786 ***
		(0.044)	(0.083)
Temp * Green			0.727 ***
			(0.109)
Climate controls	Yes	Yes	Yes
Company controls	Yes	Yes	Yes
Year	Yes	Yes	Yes
Industry	Yes	Yes	Yes
_cons	−6.216	−9.973	−7.992
	(23.950)	(24.138)	(24.064)
N	23,249	23,249	23,249

Note: Significance at the 1%, 5%, and 10% level is indicated by ***, **, and *, respectively.

. This paper finds that after the introduction of the interaction term, the coefficients of the core explanatory variables are still significantly negative, while the coefficients of the interaction term are significantly positive, which indicates that entrepreneurs’ green human capital plays a negative moderating role, that is to say, firms with entrepreneurs’ green human capital can effectively mitigate the inhibiting effect of climate change on their green technological innovation.

Overall, climate change poses significant challenges and negative impacts on green technological innovation, but entrepreneurial green human capital shows its unique value in this context. It not only facilitates the effective acquisition and efficient management of green knowledge, but also profoundly influences the business management decision-making process, ensuring that environmental factors are fully integrated into strategy development, thus helping firms to realize SDG 12 (the goal of responsible consumption and production). This forward-looking decision-making model skillfully balances the inherent contradiction between the pursuit of economic benefits and the realization of SDG 13 (climate action goals) and demonstrates the wisdom and commitment of firms on the road to sustainable development. Therefore, in the face of the adverse impacts of climate change, entrepreneurs’ green human capital can play a key buffering role, effectively mitigate the negative impacts on green technological innovation activities, and contribute to the sustainable development goals of SDG 9 (industry, innovation, and infrastructure).

In order to further analyze whether the mitigation of entrepreneurs’ green human capital varies by firm size and industry, we re-ran the regression by dividing the firms into large and small firms according to the 50% quartile of the firm’s total assets at the end of the year, and into heavily polluting and non-heavily polluting firms. The regression results are shown in

Table 7. Further analysis of moderating effects.

	(1)	(2)	(3)	(4)
	Heavily Polluting	Non-Heavily Polluting	Small Firm	Large Firm
Temp	−0.141	−0.184 *	−0.018	−0.277 *
	(0.100)	(2.221)	(0.076)	(0.112)
Green	0.439 *	−0.556	0.757 ***	0.776
	(0.179)	(0.758)	(0.112)	(0.452)
Temp * Green	−0.597 ***	−1.454	−0.781 ***	−0.450
	(0.144)	(1.250)	(0.138)	(0.256)
Climate controls	Yes	Yes	Yes	Yes
Company controls	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes
_cons	−9.042 *	−14.771	−72.251	−1.629 **
	(4.205)	(15.530)	(201.747)	(0.618)
N	15,844	10,216	11,625	11,624

Note: Significance at the 1%, 5%, and 10% level is indicated by ***, **, and *, respectively.

.

The green human capital of entrepreneurs is more effective in mitigating the negative impacts of climate change on green technological innovation in firms with heavy polluters than in small-scale firms. This is mainly attributed to the urgent need for green technological innovation in heavily polluting firms under environmental regulations and social supervision, and the high flexibility and innovativeness of green innovation in small-scale firms under resource constraints. The green human capital of entrepreneurs effectively reduces the inefficiency loss of these firms in the face of the challenge of climate change through the optimization of production modes, the promotion of technological innovation, and the cultivation of a green culture, and promotes the enhancement of their green technological innovation capacity.

4.4. Heterogeneity Analysis

In order to better identify the impact of climate change on firms’ green technology innovation, this paper analyzes three aspects: external pressure, resource endowment, and firm characteristics. Specifically, this paper focuses on the following factors: investor concern, the intensity of environmental regulation in the city where the firm is located, the resource endowment of the city where the firm is located, the life cycle of the firm, the factors of production of the firm, whether the firm is a heavy polluter, whether the firm belongs to the high-tech firm, and whether the firm belongs to the manufacturing industry.

4.4.1. Differences in Investors’ Attention

This paper divides the high and low investor attention according to the Baidu index of listed firms; when a firm’s Baidu index is greater than or equal to the average value of the industry, it is considered to receive high investor attention, and vice versa, it is low. From the regression results in

Table 8. Heterogeneity analysis of investors’ attention.

	(1)	(2)
	Higher	Lower
Temp	−0.146	−0.117 *
	(0.076)	(0.058)
Climate controls	Yes	Yes
Company controls	Yes	Yes
Year	Yes	Yes
Industry	Yes	Yes
_cons	−8.397	−291.795
	(20.015)	(468.247)
N	6833	16,070

Note: Significance at the 10% level is indicated by *.

, when a firm receives high investor attention, climate change does not affect its green technology innovation, while when a firm receives low investor attention, climate change significantly inhibits its green technology innovation. The above results indicate that firms with high investor attention can mitigate the inhibiting effect of climate change on their green technology innovation.

As the severity of the global climate change problem grows, its impact on the global economic system, ecological environment and even the sustainable development of human society has become a topic that cannot be ignored. Against this backdrop, investors’ environmental awareness has experienced a significant awakening and deepening, leading to a fundamental shift in capital market investment preferences. The investor community no longer only pursues short-term financial returns but pays more attention to the long-term value creation ability of firms. Firms that have received more attention from investors will embrace the concept of sustainable development more actively and proactively after fully recognizing the changes in market trends and investor preferences. These firms tend to regard sustainable development as the core of their strategies, not only pursuing economic benefits, but also harmonizing social and environmental benefits.

Against this backdrop, firms that receive more attention from investors are able to demonstrate stronger adaptive and innovative capabilities in the face of the inhibiting effects of climate change on their green technological innovations. These firms often have more resources and motivation to promote green technological innovation, thus mitigating the negative impact of climate change on their green technological innovation to a certain extent. Therefore, firms with high investor concern can mitigate the inhibitory effect of climate change on their green technological innovation to a certain extent and inject new vitality into their sustainable development by actively responding to the challenge of climate change and strengthening green technological innovation.

4.4.2. Differences in Environmental Regulation

This paper uses Python to perform lexical analysis on the work reports of prefecture-level municipal governments, counting the frequencies of keywords related to environmental regulation. The keywords include “environmental protection”, “pollution”, “energy consumption”, “emission reduction”, “sewage”, “ecology”, “green”, “low carbon”, “air”, “chemical oxygen demand”, “sulfur dioxide”, “carbon dioxide”, “PM10”, and “PM2.5”, among others. If the word frequency is above the average, it indicates strong environmental regulation intensity in that prefecture-level city; otherwise, it is considered weak.

According to the regression results in

Table 9. Heterogeneity analysis of environmental regulation.

	(1)	(2)
	Stronger	Weaker
Temp	−0.134 *	−0.178 **
	(0.059)	(0.073)
Climate controls	Yes	Yes
Company controls	Yes	Yes
Year	Yes	Yes
Industry	Yes	Yes
_cons	−4.183	−2.753
	(24.517)	(15.726)
N	11156	11713

Note: Significance at the 5% and 10% level is indicated by ** and *, respectively.

, cities with stronger environmental regulation exhibit less negative impact of climate change on green technological innovation, suggesting that environmental regulation promotes firms’ green technological innovation and effectively mitigates the negative effects of climate change.

From a static perspective, environmental regulations are often viewed as an external pressure that directly increases the operating costs of firms, which cover the acquisition of pollution control equipment, operation and maintenance costs, and adjustments to production processes to meet environmental standards. The intuitive result of this cost effect is that firms face a greater financial burden in the short term, which may lead to a temporary decline in overall productivity, especially at a stage when resource reallocation and technological transformation have not yet been completed, and firms may slow down the pace of investment in green technology innovation, as it is difficult to directly translate these investments into economic benefits in the short term.

However, when we turn to the perspective of dynamic analysis, the role of environmental regulation takes on a more complex and positive aspect. According to Porter’s hypothesis, environmental regulation should not be seen as an obstacle to firms’ development, but rather as an important driver of technological innovation. Porter’s hypothesis suggests that while it is true that firms may face increased costs in the early stages of environmental regulation, this pressure can be transformed into a powerful driver of productivity in the long run through the so-called “innovation compensation effect”. The innovation compensation effect refers to the fact that through technological innovation, such as the development of more efficient pollution treatment technologies and the adoption of more environmentally friendly production processes and raw materials, firms can not only effectively reduce the cost of pollution control, but also achieve significant improvements in production efficiency, product quality, market competitiveness, and other aspects, thus optimizing their overall operating costs in the long term. In some cases, the productivity gains brought about by technological innovation can even outweigh the additional costs incurred by environmental regulations, realizing “green growth” for firms.

4.4.3. Differences in Resource Endowments

Resource-based cities, as cities with the extraction and processing of natural resources such as minerals and forests as their leading industries, have long been subjected to the phenomenon of the “resource curse”, in which the abundance of resources has led to the negative effects of impeded economic growth, environmental degradation, and imbalance in the social structure. The core of this phenomenon lies in the homogenization of resource-based industries, the rigidity of industrial structure, and the lack of economic resilience after resource depletion. In order to solve this dilemma and promote the transformation of resource-based cities into diversified, green, and sustainable cities, China has issued the “Notice of the State Council on the Issuance of the National Sustainable Development Plan for Resource-based Cities (2013–2020)” (referred to as the Plan), which serves as a policy guide for the sustainable development of resource-based cities. Resource-based cities have long faced the “resource curse” phenomenon. This refers to the negative effects of resource abundance, including hindered economic growth, environmental degradation, and social imbalance.

In this paper, the cities to which firms belong are classified into resource-based cities and non-resource-based cities according to the Plan, and resource-based cities are further subdivided. The regression results in

Table 10. Heterogeneity analysis of resource endowments.

	(1)	(2)	Division of Resource-Based Cities
	Resource-Based	Non-Resource-Based	Growth-Oriented	Mature	Declining	Renewing
Temp	0.034	−0.149 **	0.110	−0.015	−0.046	0.479
	(0.146)	(0.047)	(1.972)	(0.245)	(0.349)	(0.245)
Climate controls	Yes	Yes	Yes	Yes	Yes	Yes
Company controls	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes
_cons	−21.060 **	−19.057	−28.036	−3.313 **	7.967	−6.915
	(6.876)	(14.000)	(3.275)	(0.928)	(8.739)	(9.543)
N	2172	20,905	101	1078	447	546

Note: Significance at the 5% level is indicated by **.

show that climate change significantly inhibits the green technology innovation of firms in non-resource-based cities. However, for firms in resource-based cities, the impact of climate change on green technology innovation is insignificant.

First, for firms in non-resource cities, the significant dampening effect of climate change can be attributed to the relative diversity of their industrial structure, especially the predominance of tertiary industries such as services. Climate change not only exacerbates the volatility of the natural environment, but also significantly increases the uncertainty of the business environment by affecting market demand, supply chain stability, and energy prices, among other dimensions. This uncertainty, in turn, raises the cost of financing for firms, as investors tend to demand higher returns in the face of higher risks. To cope with these challenges, firms in non-resource cities may be forced to adopt a more conservative business strategy, prioritizing the pursuit of profit maximization in the short term in order to maintain their basic operations and financial soundness. Such a strategic orientation not only reduces the willingness and ability of firms to invest in long-term R&D, especially green technology innovation, but also triggers an “innovation crowding-out effect”, whereby limited resources are reallocated to non-innovative, short-term revenue-generating projects, which significantly hinders the development of green technology innovation activities.

In contrast, firms in resource cities show a different pattern of response to climate change, thanks in large part to the guidance and support provided by the Plan’s policies. Through the implementation of a series of well-designed transformation strategies, including but not limited to optimizing industrial structure, promoting resource conservation and efficient recycling, and strengthening ecological environment management and restoration, resource cities have effectively alleviated the pressure on the natural environment caused by resource extraction activities over the long term. These transformation efforts have not only helped to break the cycle of the “resource curse”, in which resource-rich regions may instead fall into economic stagnation due to over-reliance on resource extraction, but have also, to a certain extent, enhanced the city’s capacity for sustainable development. More importantly, these transformation strategies have enhanced the environmental adaptability and resilience of firms, enabling them to maintain relatively stable production and business activities in the face of external shocks such as climate change. In addition, the application and promotion of green technologies encouraged during the transformation process, as well as the government’s support and incentives for green innovation projects, have together stimulated the potential of firms in resource-based cities in the field of green technological innovation, and facilitated the shift from resource dependence to an innovation-driven development model.

In summary, the different impacts of climate change on the green technological innovation of firms in non-resource-based and resource-based cities reflect the role of industrial structure differences and policy orientation, and also highlight the fact that, in responding to global environmental challenges, the adoption of differentiated and adaptive transformation strategies is crucial for promoting green economic transformation and sustainable development.

4.4.4. Differences in Firm Lifecycle

In this paper, firms are categorized into three stages—growth, maturity, and decline—based on net cash flow generated from operating, investing, and financing activities [68]. The regression results, presented in

Table 11. Heterogeneity analysis of firm lifecycle.

	(1)	(2)	(3)
	Growth Stage	Mature Stage	Decline Stage
Temp	−0.306 ***	0.052	−0.211
	(0.067)	(0.071)	(0.119)
Climate controls	Yes	Yes	Yes
Company controls	Yes	Yes	Yes
Year	Yes	Yes	Yes
Industry	Yes	Yes	Yes
_cons	−4.981	−3.927	−1.473
	(25.127)	(2.312)	(1.992)
N	9453	8394	4554

Note: Significance at the 1% level is indicated by ***.

, show a significant inhibitory effect of climate change on green technology innovation for firms in the growth stage, whereas the effect is not pronounced for those in the maturity or decline stages.

Growing firms, as emerging forces in the market, are in a critical period of building market position, shaping brand image, and expanding business scope. They often have to cope with multiple challenges, such as unclear market positioning, unstable product lines, and continued financial constraints. On top of this, a series of uncertainties triggered by climate change, such as the frequency of extreme weather events and changes in resource allocation patterns, have further exacerbated the complexity and unpredictability of the operating environment for these firms. Although actively investing in green technological innovation can significantly enhance the sustainable development capability and market competitiveness of firms from a long-term perspective, in the short term, such innovative activities often require huge financial support, technological accumulation, and time costs, and the transformation and application effects of their results are uncertain. Therefore, under the urgent pressure of survival, firms in the growth stage tend to prioritize the allocation of limited resources to areas that can rapidly improve their business conditions, such as market expansion and production capacity enhancement, thus neglecting the importance of green technology innovation to a certain extent.

In contrast, mature firms have demonstrated strong market adaptability and risk resilience by virtue of the deep foundation they have accumulated in the market. They usually have solid market shares, mature product lines, and well-established supply chain management systems, and are able to capture and respond to changes in market demand more acutely. In the face of the challenges posed by climate change, mature firms are not only able to identify market opportunities for green technology innovation more effectively, but also flexibly adjust their innovation strategies according to the actual situation, such as increasing R&D investment in energy-saving and emission reduction technologies, renewable energy utilization, etc., so as to maintain their leading position in the market and effectively cope with environmental risks.

As for the declining firms, they are facing multiple difficulties such as resource depletion, shrinking market share, and brand image damage, and their willingness and ability to invest in green technology innovation are limited. However, climate change may, through indirect means, such as profound changes in market demand structure, prompt these firms to make strategic adjustments and seek new paths for survival and development. For example, some declining firms may choose to enter the green technology field through business transformation and upgrading or cooperation with other firms, with a view to finding growth points in new blue oceans of the market. However, such impact mechanisms are usually complex and indirect, often involving a combination of factors, and it is therefore difficult to directly attribute them to the direct impact of climate change on green technology innovation activities.

4.4.5. Differences in Factors of Production of Firms

To assess whether differences in production factors lead to varying effects of climate change on firms’ green innovation, this paper categorizes listed firms into labor-intensive, technology-intensive, and asset-intensive firms based on the 2012 industry classification standards of the China Securities Regulatory Commission. The regression results, presented in

Table 12. Heterogeneity analysis of firms’ factors of production.

	(1)	(2)	(3)
	Labor-Intensive	Technology-Intensive	Asset-Intensive
Temp	−0.187 **	−0.092	−0.254 **
	(0.177)	(0.060)	(0.112)
Climate controls	Yes	Yes	Yes
Company controls	Yes	Yes	Yes
Year	Yes	Yes	Yes
Industry	Yes	Yes	Yes
_cons	0.274	2.810	0.783
	(0.106)	(25.209)	(0.308)
N	8375	10,216	4232

Note: Significance at the 5% level is indicated by **.

, indicate that climate change significantly inhibits green technological innovation in labor-intensive and asset-intensive firms, while the effect on technology-intensive firms is not significant.

Labor-intensive firms are highly dependent on human resources, and climate change may reduce labor productivity, cause production disruptions and increase operating costs, thereby inhibiting green technology innovation. These firms lack incentives to innovate because of the high cost of technology transfer and because their products are targeted at price-sensitive markets. Even if they do innovate, they may not realize the expected benefits due to low market acceptance.

Technology-intensive firms with strong R&D capabilities and the ability to respond quickly to market and technological changes are more likely to see climate change as an opportunity for technological innovation. Their products are oriented to the global market, with higher value-added and diversified needs, and are more likely to receive government policy support.

Asset-intensive firms have large fixed asset investments and high conversion costs, and climate change may lead to depreciation of existing investments, discouraging investment in green technology innovation. These firms need to plan for the long term, but the long payback period of green technology innovation may make them more interested in short-term benefits. At the same time, the environmental risks associated with climate change increase operational uncertainty and make investment decisions more cautious.

4.4.6. Differences in the Industries

In this paper, listed firms are categorized into heavily polluting and non-heavily polluting firms, high-tech and non-high-tech firms, as well as manufacturing and non-manufacturing firms according to the China Securities Regulatory Commission’s (CSRC) 2012 industry classification standards. The regression results are shown in

Table 13. Analysis of heterogeneity of industries in which firms are located.

	(1)	(2)	(3)	(4)	(5)	(4)
	Heavily Polluting	Non-Heavily Polluting	High-Tech	Non- High-Tech	Manufacturing	Non- Manufacturing
Temp	−0.127 *	−0.092	−0.068	−0.185 ***	−0.173 ***	−0.090
	(0.054)	(0.060)	(0.075)	(0.057)	(0.051)	(0.095)
Climate controls	Yes	Yes	Yes	Yes	Yes	Yes
Company controls	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes
_cons	−8.360	2.810	−4.170	−8.243	2.008	−4.845
	(24.321)	(25.209)	(4.364)	(2.930)	(24.574)	(3.906)
N	15,844	10,216	5974	17,275	14,515	8734

Note: Significance at the 1% and 10% level is indicated by *** and *, respectively.

. The impact of climate change on green technology innovation varies across different types of industries.

Climate change significantly dampens green technology innovation in heavily polluting firms, but not in non-heavily polluting firms. Heavily polluting firms may reduce their R&D investment in the short term because they need to invest a lot of money in pollution control and compliance management, and they face a high threshold for green technology innovation because of their long-term reliance on traditional technologies. In contrast, non-heavily polluting firms have low emissions, little pressure on environmental protection, diverse products that are easy to adjust, a good technological foundation, and benefit from government policy support, so the impact of climate change on their green technological innovation is not obvious.

Climate change significantly inhibits green technology innovation in non-high-tech firms, but not high-tech firms. Non-high-tech firms encounter the challenges of technical barriers and high transition costs in green technology innovation due to their weak technological base, limited R&D investment, and major reliance on traditional technologies and market models. Climate change-induced resource shortages and tightened environmental regulations further exacerbate their difficulties. High-tech firms, with their strong technological innovation capability, abundant R&D resources, efficient resource acquisition and utilization ability, as well as keen market insight and policy adaptability, show stronger adaptability and competitiveness in green technological innovation, and are able to respond quickly to the challenges of climate change, reduce environmental impacts, and maintain a leading position in market changes and policy adjustments, so the impact of climate change on their green technological innovation is relatively insignificant. Therefore, the impact of climate change on its green technology innovation is relatively insignificant.

Climate change significantly inhibited green technology innovation in manufacturing firms, but did not affect non-manufacturing firms. Our analysis finds that manufacturing firms are often more reliant on traditional energy sources and processes, making them more difficult and costly to transform in the face of climate change challenges. In contrast, non-manufacturing firms show greater flexibility and are less constrained by traditional production methods and are therefore less vulnerable to climate change in terms of green technology innovation.

5. Conclusions and Suggestions

5.1. Research Conclusions

Taking Chinese A-share listed firms from 2011 to 2020 as the research sample, this paper thoroughly explores the impact of climate change on green technology innovation through empirical analysis.

The findings show that, firstly, climate change does have a significant inhibitory effect on green technology innovation. This finding remains robust and plausible by replacing key variables and changing the sample size, as well as endogeneity treatments

Secondly, entrepreneurs’ green human capital plays an important role in mitigating the adverse effects of climate change. Entrepreneurs with high green human capital are able to keenly capture the opportunities of green development and lead their firms towards green technological innovation, thus effectively mitigating the inhibitory effect of climate change on firms’ green technological innovation.

Furthermore, external monitoring pressure is also one of the key factors to promote firm green technology innovation. When firms face higher investor attention and stronger urban environmental regulations, they are more inclined to increase their investment in green technology innovation in response to the expectations and requirements of external supervision. This external pressure mechanism promotes the development of green technology innovation to a certain extent.

In addition, this study also found that resource-based cities showed some resilience in responding to climate change challenges. Compared with non-resource cities, resource cities have successfully broken the “resource curse” phenomenon and realized the coordinated development of resource development and environmental protection through positive adaptive behaviors, such as industrial structural adjustment and green technological innovation, and this finding provides useful insights for the green transformation of resource cities.

Finally, different types of firms show different effects in resisting the inhibiting effect of climate change on their green technological innovation. Mature firms, non-polluting firms, high-tech firms, and non-manufacturing firms show stronger adaptive and innovative capabilities in this process and are able to resist the negative impacts of climate change more effectively.

5.2. Recommendations

In view of this, we put forward the following comprehensive proposals to promote the global green transition:

First, international cooperation on green innovation should be strengthened; a platform for transnational technology exchange, joint research and development, and financial support should be built; and cooperation with international financial institutions should be deepened, so as to accelerate the global dissemination and sharing of green technologies, promote the green transformation of the global economy, and enhance the capacity for global climate adaptation. This will not only provide countries with valuable green technology resources and learning opportunities but also promote the improvement and development of the global green innovation system and enhance the international image and influence of participating countries.

Secondly, the Chinese government should build a comprehensive green innovation policy system, formulate long-term planning and differentiated support strategies, and incentivize firms to increase their green technology innovation investment through diversified policy tools, such as financial subsidies, tax incentives, green credit, and R&D funding. At the same time, we should strengthen the construction of environmental regulations, improve the information disclosure mechanism, promote the green transformation of resource cities, and promote inter-regional cooperation and resource sharing, so as to achieve the optimization and upgrading of industrial structure and sustainable economic development. The implementation of these policies and measures will enhance China’s competitiveness in the field of global green technology and strengthen China’s positive role in international climate governance.

Finally, at the firm level, we suggest clarifying the strategic positioning of green technology innovation, increasing R&D investment and optimizing resource allocation, setting up green R&D departments, and strengthening the R&D and application of green technology. At the same time, firms should strengthen the quality training of green technology innovation in their teams and enhance the green innovation awareness and skills of team members; strengthen communication and interaction with investors and the public; enhance transparency; attract more green investment; and build a green supply chain system to enhance market competitiveness. The implementation of these measures will enhance the green technology innovation capability of firms, contribute to the green transformation and sustainable development of China’s economy, and at the same time enhance the competitiveness and brand influence of Chinese firms in the international market.

Through the implementation of the above comprehensive recommendations, the world, the Chinese government, and firms will work together to promote the in-depth development of green innovation and transformation, which will not only promote the green transformation and sustainable development of the global economy but also contribute Chinese wisdom and strength to global climate governance.