Carbon emissions and low-carbon innovation in firms.

Most of the previous studies of environmental innovation focus on the impact of environmental innovation on carbon emissions. This study rarely examines the internal causes and mechanisms of influence of low-carbon innovation. This study focuses on the effect of carbon emissions on low-carbon innovation in firms. Using a panel data set of Chinese A-share firms, this study finds that the increase in carbon emissions promotes low-carbon innovation. This promoting effect comes from high carbon emissions increasing the pressure to reduce carbon emissions in firms and prompting firms to increase R&D investment, and the effect is more pronounced in firms with lower equity concentration or high-tech firms. It is also found that indirect carbon emissions do not promote low-carbon innovation, while other types of carbon emissions do. This study expands the research on the internal causes of low-carbon innovation in firms, examines the logic influencing low-carbon innovation in firms from the perspective of emission reduction motives and methods, reveals that global warming contains opportunities for the development of low-carbon innovation in firms, and provides a reference for optimizing the carbon emissions calculation system.