Climate policy uncertainty and firm-level total factor productivity: Evidence from China

Using 2605 Chinese A-share listed companies in the mining, manufacturing, and energy production supply sectors from 2009 to 2020, we examine relationship between climate policy uncertainty (CPU) firm-level total factor productivity (TFP). The main findings are as follows: First, CPU significantly reduces TFP, with a greater impact on low-productivity firms than high-productivity firms; second, negative effect of TFP is most pronounced for non-state-owned, labor-intensive, capital-intensive companies; third, hinders research development investment amount free cash flow. These results indicate that exerts impacts mainly via its effects capital status companies. Our remain valid after series robustness tests controlling endogeneity. government should introduce forward-looking policies reduce uncertainty.