Greening the Grid: How UHV Development Drives Corporate Green Innovation 

Abstract

The existing literature predominantly examines demand-side drivers that boost green innovations by enhancing their value, whereas the influence of supply-side drivers-such as the enhancement of conditions facilitating the development and execution of new ideas-remains relatively underexplored. This study bridges this gap by examining the impact of integrating regions into the Ultra High Voltage (UHV) network on innovation activities, specifically focusing on green innovation related to energy generation and energy use efficiency. Utilizing data on patent applications from Chinese listed firms from 2006 to 2016, our findings reveal a significant positive correlation between UHV integration and green patent applications in connected regions, especially those integrated as receiving ends. Results of mechanism analysis reveal that the positive impact is attributed to increased R&D investment by firms, particularly in industries with higher electricity intensity. Furthermore, the effect is found to be more pronounced for firms lacking prior experience in green innovation, indicating that supply-side factors such as UHV integration play a pivotal role in assisting firms in overcoming the entry barrier to green innovation. Heterogeneity analysis indicates a more heightened effect for new firms, those listed on ChiNext, firms with lower levels of intangible assets, lower industry concentration and higher proportion of female executives. Overall, this study contributes to the understanding of the underexplored influence of energy initiatives on the advancement of green innovation and technological change.

Keywords: Energy infrastructure, Ultra High Voltage, Green innovation

JEL Classification: O31, O32, Q41, R11