Does the timing of subsidized loans matter for clean energy technological innovation? Evidence from China

Clean energy technological innovation is essential to reduce energy security risks, and policy support is necessary to remedy its double positive externalities. Subsidized loans are one of the important instruments by integrating policy and the market factors. However, issuing subsidized loans at different time points may have different impacts on corporate technological innovation. This is an issue that has not yet been clarified. The study involves the manual collection of data on subsidized loans of clean energy enterprises. Based on the time sequence of subsidized loans and enterprises’ research and development (R&D) activities, subsidized loans are manually classified into a “prior” group (low-interest loans where subsidies are given beforehand) and a “post” group (interest subsidies where subsidies are given afterwards). The impacts and associated mechanisms of subsidized loans at different time points on technological innovation of clean energy enterprises (TICE) are then analyzed. The results indicate that compared with interest subsidies, low-interest loans have a stronger positive effect on future TICE. Financing constraints play a mediating role in the process. Interest subsidies, as a type of post-subsidized loan, do not, by definition, stimulate TICE that has occurred in the past; instead, they may benefit future R&D activities. In addition, financial development may play a positive moderating role in the process of interest subsidies affecting future TICE. Moreover, there is heterogeneity in the impacts of subsidized loans on TICE. The government should attach importance to the prior subsidized loans to promote clean energy technological innovation, thus reducing energy security risks.