Regional financial reform and corporate green innovation–Evidence based on the establishment of China National Financial Comprehensive Reform Pilot Zones

Abstract

Green innovation is a micro-individual behavior that balances development and environmental protection, but relies on a good macro-market environment and institutional safeguards. A policy named China National Financial Comprehensive Reform Pilot Zones aims to improve the regional financial environment. This paper uses it as a quasi-natural experiment to measure the role of regional financial reforms on corporate green innovation. we found that: regional financial reforms significantly enhance corporate green innovation. Next, this green innovation promotion is more pronounced for regions with developed markets or green financial reforms, as well as for high-polluting and entity companies. Furthermore, the financing constraints and size of companies have an impact on the redistribution of reform dividends.