Assessing the impact of green patents on pollution reduction: A micro-level study of Chinese industrial firms

As global warming and environmental degradation escalate, policymakers worldwide increasingly advocate for the development of green patents. However, there is ongoing debate regarding the effectiveness of green patents in actual pollution reduction. Some studies suggest that firms may engage in green patenting activities to align with government and market expectations rather than achieving substantive breakthroughs in pollution reduction. In light of this, it is crucial to examine the impact of green patents on pollution reduction. This study employs a PSM-DID model to analyze the impact of green patents on pollution emission intensity using plant-level data from Chinese industrial firms. The results demonstrate that with an average increase of 1% in the number of green patents, the industrial waste gas emission intensity and industrial wastewater discharge intensity decreased by 4.74% and 8.68%, respectively. Furthermore, pollution treatment facilities were found to be more effective than green patents during the sample period. On average, the contribution of waste gas treatment facilities and wastewater treatment facilities in pollution reduction is 3.33% and 9.79% higher than that of green patents. These findings suggest that firms should adopt a balanced approach when making decisions on pollution reduction. Further analysis shows that the pollution reduction effect of green patents is partly at the expense of the total factor productivity of firms. This trade-off highlights the need for policy interventions to support firms in integrating green technologies without compromising productivity. This study underscores the emphasizes of transitioning from end-of-pipe pollution control to green production processes to achieve sustainable development in China. •Green patent is an important tool to reduce pollution emission intensity.•High breadth green patents have stronger pollution reduction effects.•Pollution treatment facilities contribute more to pollution reduction than green patents.•Pollution reduction effect of green patents is at the cost of reducing firm's TFP.