The Effect of Green R&D Activities on China’s SO2 Emissions: Evidence from a Panel Threshold Model

Previous studies on the effectiveness of improving sustainable development have acknowledged the importance of domestic research and development (R&D) activities. However, these studies remain general and ambiguous because they assume that all R&D activities are related to energy-saving and sustainable development. The corresponding empirical evidence is scabrous and ambiguous. In this paper, we focus on the effect of green innovation R&D activities on SO₂ emission which is an important greenhouse gas affect global climate change and eco-civilization. Considering that there is heterogeneity exists in the innovation activities, the R&D activities are divided into three performers with two purposes. The empirical results based on a Chinese inter-provincial dataset of 2000-2016 suggest that the green innovation R&D activities are crucial for the reduction of the SO₂ emission. However, the innovation R&D activities of different purposes and performers show statistically differentiated effects on SO₂ emission. The major positive effect of green innovation R&D activities on SO₂ emissions reduction is mainly from enterprises and utility-type of R&D activities. A further study based on the panel threshold also indicates that effects of green innovation R&D activities on SO₂ emissions are nonlinear, depending on the technology absorptive ability.