Policy-driven innovation: Does the renewable energy development initiative foster corporate innovation in renewable energy technologies?

Renewable energy technology innovation (RETI) serves as the technological foundation for renewable energy development and has emerged as a pivotal component of the global energy transition strategy to combat climate change. While considerable research has investigated the macro influence of renewable energy policies, evidence on the micro-level performance of these policies remains limited. By manually constructing firm-level RETI and employing difference-in-differences approach, this study examines the impact of renewable energy development initiative (REDI) on enterprises' RETI. The finding indicates that REDI remarkably fosters corporate RETI. Mechanism results show that REDI spurs corporate RETI via three mechanisms: government incentives, corporate R&D investment, and corporate governance. Heterogeneity results reveal that REDI effect is prominent for SOEs and private enterprises. Furthermore, enterprises in high marketization regions are more influenced by REDI than those in low marketization ones. REDI dramatically enhances technological innovation in hydropower, wind power, solar power, and geothermal energy. This research offers pathways for other economies to advance enterprises' renewable energy development, providing valuable insights for global energy policy formulation and facilitating the acceleration of green transformation.