Independent Green R&D and Productivity under the Influence of Globalization : A Firm-level Study

This paper empirically studies the influence of firms’ green research and development (R&D) activities on productivity. It innovatively considers two R&D behaviors: independent innovation and dependent imitation. We acquire firm-level data from 41 countries between 2017 and 2019, and we create an index that evaluates how likely firms are to independently perform green R&D to enhance their environmental friendliness. We then examine how independent green R&D should affect firms’ productivity, which is estimated with a semiparametric method. Overall, independent green R&D does not significantly affect productivity. However, further analysis that considers the firms’ participation in globalization reveals interesting and robust findings. Among firms that are actively involved in the global market, a higher R&D independence does not affect or may even reduce productivity. On the contrary, firms that only produce domestically can expect a significantly positive influence of R&D independence. Other factors such as labor input and informal market competition also significantly affect productivity