Energy price uncertainty and renewable energy technological innovation: Evidence from listed Chinese firms

In the context of climate change, there is an urgent need to vigorously promote renewable energy technological innovation (RETI) for the low-carbon energy transition. However, as a key driver of RETI, the mechanism by which energy prices affect it is unclear. Based on matched data of Chinese provinces and listed firms from 2001 to 2021, we assess the impact of energy price uncertainty (EPU) on RETI using the Poisson pseudo-maximum likelihood model. The results show that EPU significantly promotes firms' RETI, and this positive impact lasts for at least three years. Mechanism analysis shows that EPU weakens firm performance by exacerbating business underinvestment and reducing market demand. Firm managers are forced to increase R&D investment in renewable energy technologies to reduce their dependence on fossil energy. Unfortunately, the promoting effect of EPU on RETI is manifested as a crowding out effect on other technological innovations. In addition, the promoting effect of EPU on RETI is more prominent in state-owned firms, energy industries, firms with environmental information disclosure, and firms with superior innovation environments. Further, we find that EPU inhibits fossil energy technological innovation (FETI) of firms and leads the change of energy technology from fossil energy to renewable energy. This study provides new insights for the effects of EPU on firm innovation from the RETI perspective.