Can the Term Structure of Credit Promote the Green Innovation in China?

Abstract

The term structure of credit is significant to the cultivation of green innovation ability and high-quality economic development in each province. Using panel data for thirty Chinese provinces from 2005 to 2019, this paper analyzes how the extending term structure of credit impacts the development of green innovation in each province and its internal mechanism. The results are as follows. Firstly, the extending term structure of credit has promoted green innovation, which is more remarkable in innovative provinces. Secondly, the mechanism analysis shows that the extending term structure of credit improves green innovation activities in provinces to a certain extent, thus reducing environmental pollution by mitigating emissions of carbon dioxide and sulfur dioxide. According to regulating effect analysis, the provincial competition for scientific and technological innovation and environmental protection helps to boost the positive effect of the extending term structure of credit on the development of green innovation. The conclusion of this study provides empirical evidence and policy suggestions for advancing the transmission mechanism of the term structure of credit, which optimizes the relevant governmental policies about green innovation promotion to further develop green innovation in various provinces.