arbiter
JournalsAccount

Innovation Under Uncertainty: Corporate Strategic Responses to Climate Policy Risk

Md Ruhul Amin et al.

Journal of Corporate Accounting and Finance2026https://doi.org/10.1002/jcaf.70034article
ABDC B
Weight
0.50

Abstract

Using a novel climate policy uncertainty (CPU) measure based on emissions legislation, climate protests, and presidential statements, we show that in response to climate policy risk, firms tend to strategically reduce their future innovation, measured by patent counts, citations, and innovation value. Green innovation, however, is less vulnerable than non‐green innovation. We argue that CPU constrains innovation through a precautionary motive: firms under high uncertainty face higher external financing costs and shift from prospector (innovation‐oriented) to defender (cost‐minimizing) strategies. Results are robust to instrumental variable estimation, firm fixed effects, and a difference‐in‐differences design exploiting the Paris Agreement as an exogenous shock. These findings underscore the strategic and policy implications of uncertainty in the transition to a low‐carbon economy. Overall, our results provide insights into policy implications.

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1002/jcaf.70034

Or copy a formatted citation

@article{md2026,
  title        = {{Innovation Under Uncertainty: Corporate Strategic Responses to Climate Policy Risk}},
  author       = {Md Ruhul Amin et al.},
  journal      = {Journal of Corporate Accounting and Finance},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1002/jcaf.70034},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Innovation Under Uncertainty: Corporate Strategic Responses to Climate Policy Risk

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.