How does environmentally induced R&D affect carbon productivity? A government support perspective

Environmentally induced R & D (ER & D) has been positioned as an essential factor in emission reduction and total factor carbon productivity (TFCP) improvement; however, how government support moderates ER & D's impact on TFCP is unclear. Using 30 Chinese provinces' panel data for 1998-2020, this paper applies the systemic generalized method of moments (SYS-GMM), dynamic threshold, and spatial Durbin models to explore ER & D's impact on TFCP under various types of government support. The results show a "U-shaped" ER & D-TFCP relationship. All types of government support can positively moderate ER & D's impact on regional TFCP. With government support as the threshold variable, ER & D's impact on green total factor productivity gradually increases. Moreover, ER & D and government support show a spatial spillover effect on TFCP. This paper offers policy implications about ER & D investment and TFCP improvement for China and other developing countries.