Green Finance and Corporate Green Innovation: Based on China’s Green Finance Reform and Innovation Pilot Policy

Abstract

Using data on China’s A-share listed enterprises from 2012 to 2019, we investigate the impact of China’s green finance reform and innovation pilot (GFRIP) policy on green innovation by the difference-in-difference (DID) method. The results show that the GFRIP policy has a significant role in promoting enterprises’ green innovation. Heterogeneity analysis shows that the positive effect of the GFRIP policy on green innovation is only significant for heavily polluting enterprises, large enterprises, state-owned enterprises, and enterprises headquartered in regions with a low level of marketization. Debt financing is an important mechanism for the GFRIP policy to promote corporate green innovation; that is, the GFRIP policy alleviates corporate debt financing constraints and then promotes corporate green innovation. Our study provides theoretical and practical enlightenment for developing countries such as China to deepen reform of the green financial system and promote green innovation.

Exploring the impact mechanism of executives’ environmental attention on corporate green transformation: evidence from the textual analysis of Chinese companies’ management discussion and analysis

“…The omission of variables can lead to endogeneity problems. Executive teams in companies of different sizes have diverse attitudes toward the environment, and there are differences in the effectiveness of green transformation strategies (Han et al 2022 ). In addition, executive shareholding affects not only decisions on environmental governance but also the efficiency of corporate green innovation (Cheng and Sun 2022 ).…”

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“…Liu et al ( 2015 ) argued that GCP has no long-term impact on firm output. Han et al ( 2022 ) found that China’s Green Finance Reform and Innovation Pilot Policy has a significant role in promoting enterprises’ green innovation. According to Qi ( 2021 ), the GCP positively affects the investment efficiency of highly polluting firms in areas with better financial ecology.…”