Is some uncertainty better than none? Nonlinear relationships between climate policy uncertainty and corporate green performance

Unclear and shifting climate policy can discourage firms from investing in greener operations, yet some unpredictability may instead push them toward innovation; where the turning point lies, and how the institutional environment reshapes it, is still debated. Leveraging a decade-long panel of Chinese A-share firms, this study links climate-policy uncertainty (CPU) extracted from provincial news sentiment to corporate green performance captured by green total factor productivity (GTFP). Fixed-effects estimations reveal a distinct inverted-U pattern: moderate CPU aligns with higher GTFP, whereas greater volatility reverses the gain. Causal robustness is verified through an instrumental-variable strategy that…