The Impact of Green Technology Research and Development (R&D) Investment on Performance: A Case Study of Listed Energy Companies in Beijing, China

The aim of this study is to investigate the relationship between green technology R&D investment and corporate performance (ROA) of 44 Beijing-listed energy companies from 2016 to 2021 using a threshold regression model. The results show that there is an inverse W-shaped nonlinear relationship between green technology R&D investment and firm performance. This means that green technology R&D investments only have a positive effect on firm performance within an appropriate green technology R&D investment interval, and a negative effect occurs outside this interval. Additionally, the study analyses the influence of three threshold variables (firm size, capital structure and capital density) on the relationship between green technology R&D investment and firm performance. The results show that firm size has an inversely- U-shaped relationship, the capital structure has a negative nonlinear relationship and the capital density has an inversely N-shaped relationship. Optimal intervals are observed for all three threshold variables. Moreover, the study shows that the green technology R&D investment intensity has a lagged effect on firm performance. The positive influence weakens over time, and the negative influence becomes more pronounced. The findings of the study can help energy companies to develop green technology R&D innovation strategies, such as differentiating green technology R&D expenditures for companies in different development situations. It can also exploit the driving effect of green technology R&D investment on firm performance in the context of China’s energy sector restructuring.