Subsidy for clean innovation considered technological spillover

Under technological spillover, this article considers the effects of subsidy to improve clean innovation. Some interesting conclusions are achieved. First, firms without innovation benefit from technological spillover and subsidy promotes firms' innovation. Second, energy price fluctuation affects innovative firms more than others. Third, carbon taxes impact outputs and profits uncertainly. Finally, more subsidy yields less emission, while the environmental efficiency of subsidy decreases with subsidy intensity.