Can green bond issuance promote enterprise green technological innovation?

Abstract

Green innovation is encouraged and green development is made possible with the help of green financial support. Green bonds, an essential component of green finance, are crucial for assisting businesses in pursuing green technological innovation (GTI). The 4107 businesses listed on the Shanghai and Shenzhen Stock Exchanges provided the research data for this article. This paper uses the propensity score matching and multi-time point Difference-in-Differences (PSM-DID) method to empirically investigate both the impact of green bond issuance on enterprise GTI and how it does so; in other words, its mechanism. According to statistics, green bond issuance can greatly increase enterprise GTI, and the outcome holds up to a number of robustness tests. In addition, heterogeneity analysis reveals that this promotion effect is more significant in large-scale, non-state-owned, and low-polluting businesses. Furthermore, mechanism tests show that green bond issuance can promote enterprise GTI through a financing restraint function, an investment incentive function and a green regulation function.