Seeing Through Green: Text-Based Classification and the Firm's Returns from Green Patents

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Main Authors: Santarlasci, Lapo, Rungi, Armando, Zinilli, Antonio
Format: Preprint
Published: 2025
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author Santarlasci, Lapo
Rungi, Armando
Zinilli, Antonio
author_facet Santarlasci, Lapo
Rungi, Armando
Zinilli, Antonio
contents This paper introduces Natural Language Processing for identifying ``true'' green patents from official supporting documents. We start our training on about 12.4 million patents that had been classified as green from previous literature. Thus, we train a simple neural network to enlarge a baseline dictionary through vector representations of expressions related to environmental technologies. After testing, we find that ``true'' green patents represent about 20\% of the total of patents classified as green from previous literature. We show heterogeneity by technological classes, and then check that `true' green patents are about 1\% less cited by following inventions. In the second part of the paper, we test the relationship between patenting and a dashboard of firm-level financial accounts in the European Union. After controlling for reverse causality, we show that holding at least one ``true'' green patent raises sales, market shares, and productivity. If we restrict the analysis to high-novelty ``true'' green patents, we find that they also yield higher profits. Our findings underscore the importance of using text analyses to gauge finer-grained patent classifications that are useful for policymaking in different domains.
format Preprint
id arxiv_https___arxiv_org_abs_2507_02287
institution arXiv
publishDate 2025
record_format arxiv
spellingShingle Seeing Through Green: Text-Based Classification and the Firm's Returns from Green Patents
Santarlasci, Lapo
Rungi, Armando
Zinilli, Antonio
General Economics
Economics
Computation and Language
This paper introduces Natural Language Processing for identifying ``true'' green patents from official supporting documents. We start our training on about 12.4 million patents that had been classified as green from previous literature. Thus, we train a simple neural network to enlarge a baseline dictionary through vector representations of expressions related to environmental technologies. After testing, we find that ``true'' green patents represent about 20\% of the total of patents classified as green from previous literature. We show heterogeneity by technological classes, and then check that `true' green patents are about 1\% less cited by following inventions. In the second part of the paper, we test the relationship between patenting and a dashboard of firm-level financial accounts in the European Union. After controlling for reverse causality, we show that holding at least one ``true'' green patent raises sales, market shares, and productivity. If we restrict the analysis to high-novelty ``true'' green patents, we find that they also yield higher profits. Our findings underscore the importance of using text analyses to gauge finer-grained patent classifications that are useful for policymaking in different domains.
title Seeing Through Green: Text-Based Classification and the Firm's Returns from Green Patents
topic General Economics
Economics
Computation and Language
url https://arxiv.org/abs/2507.02287