Insufficient green innovation efficiency by enterprises: how government subsidies can play a catalytic role？

Green innovation has made global strides, emphasizing sustainable products and green practices, yet its impact on reducing emissions has fallen short, especially as global goals become more ambitious. Despite China's 5.2% GDP growth in 2023, reliance on carbon-intensive energy has hindered progress toward net-zero goals. This study focuses on corporate green innovation efficiency (CGIE), focusing on two key areas: green technology (GT) R&D and the efficiency of transforming green achievements. We set up the database from Chinese A-share listed companies (2009–2022) using the SBM-DEA and fixed effect method to measure green innovation efficiency influenced by government subsidies, market concentration and ESG disclosure. Government subsidies reduce CGIE by 0.5% and 0.6% under the influence of firm characteristics. However, when financial constraints are included as a mediating factor, subsidies increase R&D efficiency and technology transfer efficiency by 3.4% and 3.6% respectively. ESG disclosure reflects the comprehensive benefits of enterprises, enhances transparency and trust, thereby causing differences in the effects of subsidies.