Will Green Finance Policies Contribute to Green Technology Innovation in Enterprises? Evidence from Green Finance Reform and Innovation Pilot Zone in China
Year: 2025
Type: article
Abstract: Enterprises' ability to innovate in green technology hinges on the backing of commercial bank credit funds. In light of China's escalating environmental challenges, policies in green finance have emerged as a dual tool for financial resource allocation and environmental regulation. This study scrutinizes China's phased approach to green finance reforms, with a focus on A-share listed companies in Shanghai and Shenzhen from 2012 to 2021. Employing a multi-time-point double difference model, it investigates the impact of green finance policies on enterprise green technology innovation. Results indicate a significant promotion of green technology innovation within enterprises due to green finance policies. Mechanism tests reveal that these policies primarily bolster green technology innovation by easing financing constraints, augmenting investment in innovation activities, and mitigating credit resource mismatches. In addition, in terms of firm heterogeneity, green finance policies promote nonheavy polluters, large-scale firms, and non-state-owned firms more significantly. In terms of regional heterogeneity, the effects of green finance policies are more pronounced in regions with high levels of financial development, environmental regulation, and industrialization, as well as in the eastern region.
Authors: Junlin Ren, Xiao Bie, Zihan Duan
Institution: Wuhan Textile University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
Award: G887599208
OpenAlex ID: W4406405706