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

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 climatefocused 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.