Digital Finance, Environmental Regulation, and Green Technology Innovation: An Empirical Study of 278 Cities in China

To realize green, low-carbon, and high-quality development, scientific and technological innovation is the key, but green technological innovation is costly and risky, and the effectiveness of single-principle innovation is very low. The green technology innovation ecosystem led by the government, supported by financial institutions, and with enterprises as the main body of innovation can provide policy leadership, financial guarantee, and technical support for green technology innovation, share the risk of green technology innovation on a single subject, and promote the rapid generation of green science and technology innovation results and their transformation into benefits. However, the stability of the system platform is constrained by the influence of a variety of factors, in order to promote the development of green technological innovation and to ensure the stable development of the system, this paper explores the government, financial institutions and enterprises tripartite green science and technology innovation system, establishes the tripartite evolutionary game model, and adopts numerical simulation methods to carry out the stability analysis of the system, and the results of the study show that: (1) the stability of government, financial institutions and enterprises of green science and technology co-innovation is subsidized by the government’s policy guidance, innovation benefits, high-end greenness of technology, technology spillover and other factors，strong governmental guidance on the willingness of financial institutions and enterprises to cooperate; (2) financial institutions synergistic strategy is susceptible to external factors, financial institutions subsidies to enterprises should be assessed according to the benefits of technology, degree of difficulty and the ability of enterprises; (3) the greener and higher-end technological innovations, the more the main body of each party will protect the technology, the higher the exit cost, the higher the synergistic innovation bundles; (4) the risk of green technology spillover risk is high and has a greater impact on the stability of collaborative innovation, the government should establish corresponding laws and regulations to protect intellectual property right.

Based on the panel data of 283 cities in China from 2009 to 2018, this paper analyzes the effect of urban green scientific and technological innovation enhancement on hazardous air pollutants using the GS2SLS method, which simultaneously controls for model endogeneity and spatial spillover effects and reveals the transmission mechanism of urban green scientific and technological innovation level. It was found that (1) There is a significant spatial spillover effect of hazardous air pollutants between regions, both in China as a whole and in the eastern, central, and western parts of the country, and the spatial spillover effect of hazardous air pollutants is significantly greater in the eastern and central parts of China than in the western parts. (2) Green technological innovation has a significant inhibitory effect on hazardous air pollutants in cities in eastern and central China. An extended study found that the improvement in green technology levels in innovative cities has a better effect on controlling hazardous air pollutants than in non-innovative cities. (3) The energy- saving and green economy effects have a mediating influence on the effect of green technological innovation on hazardous air pollutants in cities, and the simultaneous occurrence of these two effects in green technological innovation serves to enhance the transmission of hazardous air pollutants in order to facilitate the long-term management of haze.

In the era of green economic development, green finance serves as a crucial catalyst for green technological innovation, and both may significantly drive the upgrading of industrial structures. This study combines green finance, green technological innovation, and industrial structure into a research framework, analyzing data from 29 Chinese provinces (2003–2020) to empirically assess their impacts on China’s industrial structure using a two-way fixed-effects model. The results show the following: first, green finance and green technological innovation can significantly promote the upgrading of China’s industrial structure directly and synergistically, a finding corroborated by various robustness tests. Secondly, heterogeneity analysis reveals that there is a “path-dependency effect” in the development of green finance and technology innovation: in areas with higher population density, more developed technological markets, and lower fiscal pressure, the synergistic promotion of the upgrading of industrial structure is stronger. Thirdly, further research indicates that green finance and technology innovation impact the upgrading of industrial structure variably under command-and-control, market-incentive, and voluntary environmental-regulation tools. The most effective policy is the voluntary regulation tool, which involves higher levels of public participation. This study offers valuable insights for fostering green technology innovation, refining environmental policies, and enhancing the optimization and upgrading of industrial structure.

This paper evaluates the importance of combining digital finance with conventional finance and information technology (IT) to bring new opportunities for green technology innovation and transformation within polluting industries. This study builds a theoretical framework "digital finance → financing constraints → R&D investment → green technology innovation" to demonstrate the causal mechanism between digital finance and firms' green innovation by using the serial two-mediator model. The study shows that digital finance could reduce financial constraints and increase R&D investments, thereby improving enterprises' green technology innovation in the long run. Moreover, based on the moderating effect model, we find that digital transformation in a polluting firm tends to strengthen the linkage between digital finance and green technology innovation through supervising the use of loans, reviewing green technology innovation projects, and reducing managers' short-sighted behaviors to avoid agency problems. Furthermore, the heterogeneity analysis shows that the effects of digital finance on green innovation are more apparent in state-owned enterprises and the regions with lower financial development and with higher financial supervision.

In order to further promote urban green development in Central China, the research uses panel data from 80 cities in Central China from 2011 to 2022 as a sample and employs the linear regression method, mediating effect, and threshold effect to empirically test the impact mechanism of green technology innovation on urban green development in Central China. The results show that: first, green technology innovation significantly promotes urban green development, and the conclusion still holds when considering endogeneity. Second, the regional heterogeneity test found that the differences in resource endowments among provinces lead to significant differences in the impact of green technology innovation on urban green development. Third, the mediating effect found that digital inclusive finance and industrial structure upgrading both play partial mediating roles between green technology innovation and urban green development. Fourth, the threshold effect found that urban environmental infrastructure investment has a positive single threshold effect between green technology innovation and urban green development. This paper not only enriches the research on urban green development at the academic level but also provides reference value for the sustainable development of cities in other developing countries and regions. The objective of this study is to explore how to promote the green development of cities in Central China from the perspective of green technology innovation and to provide a reference for other developing countries and regions. In this topic, the main concepts and theories that underpin the research are presented. First, the concept of sustainable development lays the main tone of this study. Second, Schumpeter's innovation theory provides theoretical support for establishing the connection between green technology innovation and urban green development. The methodology adopted for this research comprises the entropy method, panel multiple linear regression model, mediation effect model, and threshold effect model. The original data used in this study are authoritative secondary data from the official statistical yearbooks of various provinces in Central China. The results obtained revealed that green technology innovation has a significant positive promoting effect on urban green development in Central China, and digital inclusive finance and upgrading of industrial structure have significant partial mediating roles in the process of green technology innovation promoting urban green development in Central China. The threshold effect found that urban environmental infrastructure investment has a significant single threshold effect in the process of green technology innovation promoting urban green development in Central China. In the discussion section, these results are contextualized in light of the theoretical framework, highlighting the implications and relationships identified. Possible discrepancies and limitations of the study are also considered in this section. The practical and theoretical implications of this research are discussed, providing insights into how the results can be applied or influence practices in the field of urban green development. First, this study provides new ideas for policymakers in urban green development in Central China. Second, this study provides a reference for urban green development in other developing countries and regions. These implications could encompass green technology, green lifestyle, green production, and green industry, etc. This study contributes to the literature by considering new ideas for green technology innovation, as well as the intermediary effect of digital inclusive finance and the threshold effect of green investment. The relevance and value of this research are evidenced by the fact that green technology innovation, digital inclusive finance, and green investment provide new ideas for policymakers and enterprises for urban green development.

In the context of today’s global environmental challenges, manufacturing enterprises are gradually taking green technology innovation as a strategy to enhance sustainable development ability. This study discusses the application of hybrid intelligent technology in promoting green technology innovation decision-making in manufacturing enterprises. Through data preprocessing and model construction, it is found that energy consumption, emissions, standard compliance, environmental quality and market response are closely related to the green technology innovation score of enterprises. The results show that efficient energy management and active compliance with environmental standards have a significant impact on improving the environmental performance and technological innovation of enterprises. The market’s positive response to green technology has significantly promoted the rapid development and application of the technology. This study not only provides manufacturing enterprises with strategy and decision support for green technology innovation, but also provides policy makers with insights for promoting sustainable development. Through in-depth analysis, this paper emphasizes the importance and effectiveness of comprehensive application of hybrid intelligent technology in the process of green technology promotion.

Green technological innovation is an overarching approach to tackling environmental pollution, and mitigating the inequality in green technological innovation between regions can contribute to environmental equity. This study measures the inequality in green technological innovation via an index and examines the influence of digital finance on that inequality using data from 285 cities in China from 2011 to 2018. The results are as follows: (1) Digital financial development alleviates the inequality in green technological innovation, and the greater the inequality is, the stronger the effect of digital finance. The development of digital finance can help regions lagging behind in terms of green technology to catch up. (2) When the financial supervision and environmental restrictions within a region are strict, the development of digital finance is more effective at reducing the inequality in green technological innovation; a higher capacity for governance in the local government and a smaller digital divide strengthen the positive effects of digital finance. (3) The development of digital finance alleviates interregional inequality in green credit, reduces market segmentation, and increases spending on environmental protection, thus narrowing the gap in the capacity for green innovation between regions. These findings not only enrich the literature on digital finance and green technological innovation but also serve as a reference for governmental departments as they optimize their strategy for developing digital finance and coordinating green development across regions.

How does heterogeneous green technology innovation affect air quality and economic development in Chinese cities? Spatial and nonlinear perspective analysis

Does the coupling of digital and green technology innovation matter for carbon emissions?

With the deteriorating ecological environment, green technological innovation (GTI) has become an effective way to strengthen environmental protection and promote economic development. Based on the 2011–2019 panel data of 30 provinces in China, this study constructs a spatial Durbin model to examine the spatial spillover effect of environmental regulation and digital finance on green technological innovation. Meanwhile, a moderating effect model and threshold effect model are employed to explore the function of digital finance in terms of the impact of environmental regulation on green technological innovation. The empirical results show that: 1) environmental regulation has significantly promoted local GTI, green invention patents (GIP) and green utility model patents (GUP), while having had negative spatial spillover effects on those three things in neighboring regions. Digital finance promotes GTI and GIP in both local and neighboring areas, but digital finance’s direct and spatial spillover effects on GUP are not significant. 2) A regional analysis shows that different intensities of environmental regulation and different digital finance levels in different regions lead to the heterogeneity of green technological innovation’s response to them. 3) Digital finance produces a positive moderating effect on environmental regulation affecting GTI and GIP in local and neighboring regions. However, digital finance’s moderating effect in terms of the influence of environmental regulation on GUP is not significant. 4) When digital finance reaches a certain threshold, environmental regulation will have a stronger role in promoting GTI. Therefore, to improve regional green technology innovation and environmental governance, the government should strengthen the integration of digital technology and financial services, and promote the construction of environmental supervision systems and green innovation policy systems.

Green credit is an innovative financial instrument that aims to promote environmentally friendly innovations. However, financial institutions, as carriers of green credit, exhibit noticeable regional differences in the effects of implementation, leading to disparities in the distribution of green credit across regions, which will have a differentiated impact on inter-regional innovation. Unfortunately, the existing literature overlooks the impact of inter-regional differences in green credit distribution on technological innovation. Therefore, this study utilized panel data from 30 provinces and cities in China from 2012 to 2021, and adopted the spatial Durbin model to study the impact of regional differences in green credit development on green technology innovation. Additionally, this paper explores the moderating effect of green credit on the spatial impact of green innovation from the perspectives of environmental regulation and digital finance. The results of this paper indicate that the development of green credit promotes green technology innovation at the local level but has a negative impact on neighboring regions. And the negative spatial spillover effect is more significant in the central and western regions and polluting industries. Through mechanism testing, this study finds that the negative spatial spillover effect on green technology innovation is primarily driven by the migration of polluting industries across regions and the turnover of green technology R&D staff in response to the pressure of green credit. Furthermore, this paper finds that marketization and public participation in environmental regulation, as well as the presence of digital finance, significantly enhance the promotion of local green technology innovation and mitigate the negative spatial spillover effect. This study provides valuable insights for the Chinese government in implementing a regional linkage strategy for green credit within the context of the green economy transition.

<abstract> <p>Since the Porter hypothesis was proposed, environmental regulation has been recognized as a critical factor influencing technology innovation. However, there is no unified conclusion on whether the relationship between the two is linear or non-linear, and environmental regulation is always examined from single angles. Therefore, according to the difference of environmental regulation implementation subjects, this paper divides environmental regulation into formal regulation and informal regulation. Utilizing the panel data of 281 prefecture-level and above cities in China from 2011-2019, the non-linear effects of heterogeneous environmental regulations on green energy technology innovation are analyzed based on the panel threshold model, and the non-linear relationship between the two under the difference in urban economic development level is further considered. The results indicate that: (1) The threshold effect of the environmental regulations on China's green energy technology innovation is significant, and there is heterogeneity in the effects of different environmental regulations. (2) At present, positive relationship are observed between the informal environmental regulation and green energy technology innovation in China, while the formal environmental regulation exerts a significant inhibitory effect on green energy technology innovation. (3) The level of regional economic development plays a significantly positive role in moderating the relationship between environmental regulation and green energy innovation. However, there exists a certain heterogeneity in the moderating role between the formal regulation-innovation link and informal regulation-innovation relationship. This study provides a reference for further clarifying the relationship between heterogeneous environmental regulations and green energy technology innovation.</p> </abstract>

Green total factor productivity (GTFP) is an essential indicator to measure economic and environmental efficiency. Moreover, formulating a reasonable environmental regulation system and promoting green technological innovation is a systematic way to improve GTFP. However, previous related studies lack to investigate the impact of environmental regulation on GTFP from the perspective of green technological innovation. For this purpose, this paper aims to examine the specific impact of environmental regulation on GTFP based on the perspective of green technology innovation, so as to provide some policy insights for the formulation of more effective implementation of environmental regulation, improve green technology innovation level, and achieve a win-win situation for both economic growth and environmental protection. Furthermore, epsilon-based measure (EBM), which includes both radial and non-radial distance functions, is used to measure the GTFP. The spatial autoregressive method is also employed to quantify the impact of environmental regulation on GTFP from the perspective of green technological innovation using panel data of 269 prefecture-level cities in China from 2004 to 2018. The main findings indicate that there is a significant spatial autocorrelation between environmental regulation and GTFP. Environmental regulation has a significant positive effect on GTFP. Environmental regulation in the local regions also significantly contributes to GTFP in neighboring regions. Besides, environmental regulation indirectly promotes GTFP by enhancing green technological innovation level. Regional heterogeneity results show that environmental regulation can not only directly promote GTFP but also indirectly significantly promote GTFP through green technological innovation in the eastern and central regions, but insignificant in the western region. Based on the above findings, we conclude that policymakers should not only develop differentiated environmental regulation standards and steadily improving the intensity and rationality of environmental regulation but also add green innovation funds supply, enhance green innovation factor allocation efficiency, and strengthen R&D talents, funds, and policies to green technology innovation, so as to drive GTFP improvement.

The unreasonable economic development model of human beings has caused the environmental pollution problem to become increasingly serious. In order to achieve a positive relationship and interaction between environmental regulation, research and development (R&D) investment, and green technology innovation, and effectively solve the “strange circle” problem between high-quality economic development and environmental pollution in China and even the world, this paper takes the panel data of industrial enterprises above designated size in Chinese mainland 31 provinces from 2009 to 2019 as a research sample. The comprehensive index of R&D investment and green technology innovation was established by the entropy method, and the panel vector autoregressive (PVAR) model was constructed from the dynamic endogenous perspective, and the dynamic interaction and regional heterogeneity between environmental regulation, R&D investment, and green technology innovation were empirically analyzed by using impulse response function and variance decomposition. We obtain the following findings: (1) Environmental regulation has a two-way interaction relationship with R&D investment and green technology innovation, and R&D investment has a promotion effect on the “green degree” of technological innovation, but its role is still weak and has lagging characteristics. (2) There is significant regional heterogeneity in the dynamic responses of the eastern, central and western parts of China. (3) In the long run, environmental regulation has a “negative crowding out effect” on R&D investment in the central region, and the phenomenon of “central collapse” still exists but will gradually weaken. Environmental regulation has a “positive innovation compensation effect” on green technology innovation. Green technology innovation and R&D investment have an obvious “Pareto improvement” effect on environmental regulation, especially in the eastern region. The conclusions of this study help to clarify the dynamic interaction between environmental regulation, R&D investment, and green technology innovation, further improve environmental regulatory policies and green technology innovation R&D decision-making, and provide an effective way to achieve green and sustainable development in China and other parts of the world.

Under the guidance of a high-quality development strategy, upholding the long-term concept of green development is the foundation allowing polluting companies to resist external environmental threats and retain their legitimate business statuses. However, the top managers of companies do not always hold long-term perspectives. To this end, we investigate the impact of management myopia on green technological innovation and its mechanism of action for heavy polluters using zero-inflated Poisson regression analysis for 2007–2020 for A-share listed heavy polluters. The empirical results show that the logarithmic value of green technological innovation decreases 1.251 units for each 1-unit increase in the management myopia level demonstrated by heavily polluting enterprises. Moreover, these results are more significant in heavily polluting enterprises with high management shareholding and those that receive more government subsidies. However, managerial myopia is suppressed in heavily polluting firms with many independent directors and institutional investors. A further study found that managerial myopia had the most significant negative impact on green technological innovation for heavy polluters in the central region, and each 1-unit increase in the managerial myopia level decreased the firm’s green technology innovation level by 3.577 units. The findings of this paper have important implications for heavily polluting firms seeking to improve their senior management appointments and governance structures, promote green technology and technological innovation, and achieve high-quality corporate development.