Green Finance and Corporate Green Innovation

Abstract

Green finance has drawn considerable attention from both academia and policymakers as a key policy instrument for promoting green development and economic transformation in China. Against the backdrop of the central government’s strategic efforts to establish a green financial system and a market-oriented green technology innovation system, this paper takes the Pilot Zones for Green Finance Reform and Innovations policy as a point of entry to examine its impact on corporate green innovation. The findings indicate that the pilot zone policy significantly enhances the level of green innovation among enterprises within the pilot regions. Further analysis reveals that the policy effect is more pronounced among firms with lower management ownership, weaker among those with larger pre-existing government green subsidies, and stronger among firms subject to higher levels of media coverage. This study provides empirical evidence for understanding green finance policies. Advancing the Pilot Zones for Green Finance Reform and Innovations policy to drive corporate green innovation is essential for promoting high-quality economic development.