World Trade Organization (WTO) trade policy reviews and green technology adoption: Global evidence

Authors

Arifa Tanveer
Shihong Zeng
Rashid Zaman, Edith Cowan UniversityFollow
Simone Scagnelli, Edith Cowan UniversityFollow

Author Identifier

Rashid Zaman: https://orcid.org/0000-0003-3111-9437

Document Type

Journal Article

Publication Title

International Review of Financial Analysis

Volume

96

Publisher

Elsevier

School

School of Business and Law

RAS ID

77909

Funders

Edith Cowan University (G1006499) / National Natural Science Foundation of China (72140001) / Beijing Natural Science Foundation (9222002) / Major Projects of the China National Social Science Fund (22&ZD145)

Comments

Tanveer, A., Zeng, S., Zaman, R., & Scagnelli, S. (2024). World Trade Organization (WTO) trade policy reviews and green technology adoption: Global evidence. International Review of Financial Analysis, 96. https://doi.org/10.1016/j.irfa.2024.103715

Abstract

This study examines the impact of WTO climate-related Trade Policy Reviews (TPR) on corporate efforts towards going green, specifically focusing on green technology adoption. Utilising a longitudinal sample comprising 30 countries from 2009 to 2019, the study provides original evidence that companies in countries with more frequent TPRs tend to adopt more green technologies. Channel analysis reveals that countries with climate-focused TPR entries, climate-related notifications, and climate-related measures effectively reduce managerial political risk perception, thereby facilitating the companies' adoption of green technologies. Additional analysis suggests a substitutive role of trade policy reviews (TPR) compared to firm-specific external monitors in promoting the adoption of green technologies. The findings also indicate a significant reduction in greenhouse gas (GHG) emissions resulting from the combined effect of climate-related TPR and increased green technology adoption. The study's baseline results remain robust even after applying various estimation techniques, such as Propensity Score matching, Entropy Balancing, and System GMM. This study's novel findings, emphasising the risk reduction and monitoring functions of such reviews in shaping companies' environmental strategies towards sustainability, provide valuable insights to policymakers, practitioners, and stakeholders.

DOI

10.1016/j.irfa.2024.103715

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 License.