The impact of green policies on innovation: the moderating role of state-ownership (1980-2024)

This paper investigates the impact of a mission-oriented industrial strategy, the EU Green Deal, on innovation across European countries, with a focus on the moderating role of state ownership. While mission-oriented policies aim to address grand challenges such as climate change, they may also exacerbate inequalities by concentrating innovation in technologically advanced regions. This study analyses green patent data from 31 European countries between 1980 and 2024, comparing the green patenting activity of state-owned enterprises (SOEs) and private firms. The findings show that while SOEs account for a small share of green innovation overall, their activity is more significant in less advanced or peripheral countries. SOEs help moderate the uneven effects of green innovation policies by contributing to a more balanced geographic distribution of technological development. These results highlight the strategic role of state ownership in mitigating regional disparities and ensuring a more equally distributed effects of industrial strategies.