The Polarization Effect and Mechanism of China’s Green Finance Policy on Green Technology Innovation

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.

In the carbon neutrality strategy, understanding the effects of green finance on green technology innovation is conductive to promoting the green transformation of the economy. Based on the micro-level and provincial panel data of Shanghai and Shenzhen A-share listed companies from 2012 to 2019, this study explored the impact of green financial development on the enterprises’ green technology innovation. Both mediating effect and moderating effect models were employed to determine the impact of green finance on green technological innovation. It was found that green finance significantly improved the enterprises’ green technology innovation, despite sufficient incentives for “quantity” and relatively insufficient motivation for “quality”. The mechanistic tests demonstrated that the green finance could encourage enterprises to improve green technology innovation by alleviating corporate financing constraints. The green innovation effect of green finance was gradually increased when the regional intellectual property protection was improved. The heterogeneity test indicated that the incentive effect of green financial development on green technology innovation was more evident in state-owned enterprises, enterprises with good internal control quality, and enterprises in the growth period. If only enterprises in the recession stage received green financial support, a “green innovation bubble” might occur. The research conclusions enrich the theories on the driving factors of enterprise green innovation and provide empirical evidence for enhancing the competitiveness of enterprise green innovation and achieving carbon neutrality.

In recent years, in the context of “double carbon” and innovation-driven synthesis, the volume of green finance has been growing year by year, and the intensity of environmental regulation has been stabilizing. As green financial technology innovation cannot be separated from the support of financial market and government policies, how to promote green financial technology innovation with green finance and environmental regulation has become a hot issue. How to control the appropriate strength of environmental regulations to promote green financial technology innovation is a matter of continuous exploration by local governments. The research of this paper is about the utility analysis of green finance policy: a policy incentive financial mechanism based on the state space model theory algorithm. Therefore, this paper introduces the theory of green finance based on the state space model algorithm and neural network model algorithm to study China’s green finance policy incentive mechanism, profoundly study the current situation of domestic green finance development, and put forward further strengthen the leading role of the government in green financial innovation. At the same time, suggestions for achieving coordinated regional development were made in terms of giving full play to the role of financial markets in promoting green technology innovation.

Green finance has originated as a critical factor for green development, where green technology innovation is a primary approach. Yet, limited information is available regarding how green finance influences green technological creation. This work probes the asymmetric linkage between green finance and green technology innovation in the selected European Union countries (Germany, Sweden, France, Italy, Netherlands, Spain, Denmark, Norway, Belgium, and Finland). Prior works adopted panel data methods to get usual outcomes concerning the green finance-green technology nexus, nevertheless the reality is that various nations did not establish such connection separately. The present work, in contrast, utilizes a peculiar tool, 'Quantile-on-Quantile,' that facilitates research to probe temporal reliance in entire nations by giving global yet economy-specific intuitions on the variables’ correlation. Estimates exhibit that green finance enhances green technology innovation in almost all our chosen nations at definite quantiles of data distribution. Furthermore, the findings expose that the extent of asymmetry throughout various quantiles of our variables differs by the economy, emphasising the relevance of policymakers paying particular consideration while employing green innovation and green finance policies.

As an essential way to promote ecological civilization, green finance is attracting wide attention. However, whether green finance can successfully regulate the green technology innovation effect of heterogeneous environmental regulations and boost green technology innovation in coordination with heterogeneous environmental regulations remains unclear. Based on the re-measurement of the green finance development index of various provinces and cities in China, this study uses the spatial Durbin model to test the above problems empirically. The results show that green finance and “market incentive” environmental regulations can promote regional green technology innovation, while “command and control” environmental regulations inhibit regional green technology innovation. Green finance plays a negative regulatory role in the mechanism of heterogeneous environmental regulations affecting green technology innovation. Green finance alleviates the negative impact of “command and control” environmental regulations on green technology innovation and weakens the positive impact of “market-incentive” environmental regulations on green technology innovation. In terms of spillover effects, green finance can effectively promote green technology innovation in neighboring regions, while heterogeneous environmental regulations have a crowding-out effect on green technology innovation in neighboring regions.

How does green finance affect energy efficiency? The role of green technology innovation and energy structure

Regional green technological progress is an important driver of regional green technology innovations. To explore in depth the impact of green finance and international technology spillover on regional green technology innovation, this study incorporates green finance, international technology spillover, and green technology innovation into the same analytical framework. In addition, based on a new perspective of regional innovation capabilities, this study analyzes the impact of green finance and international green technology spillovers on green technology innovation. The data were collected in 30 Chinese provinces from 2003 to 2019 and analyzed by a panel fixed-effects model. The interaction between green finance, international technology spillover, and regional innovation capability was investigated to understand the impact of each interaction on green technology innovation. Second, regional innovation capability was used as an intermediary variable to identify its underlying mechanism. Finally, the spatial spillover effect of green technology innovation was analyzed using the spatial Durbin model. We found that: (1) green finance, import trade, outward foreign direct investment (OFDI), and regional innovation capability can promote regional green technology innovation, while inward foreign direct investment (IFDI) has an inhibitory effect on the innovation; (2) the interaction of green finance, international technology spillovers, and regional innovation capacity positively impacts green technology innovation; (3) green finance and international technology spillovers can promote green technology innovation by promoting regional innovation capabilities; (4) and green technology innovations have spatial spillover effects, and innovations in one region can promote the growth of green technologies in adjacent regions. This study provides a reference not only for China but also for other developing countries to promote green technology advancement and achieve sustainable development goals.

Improving energy efficiency is an important pathway for the development of green and low-carbon economy. Based on the evidence from China’s green finance reform pilot zone, we apply the data of Chinese prefecture-level cities from 2005 to 2020 to analyze the action mechanism among green finance, technological innovation and energy efficiency. We find that green finance effectively promotes energy efficiency. Moreover, the analysis of action mechanism reveals that while green finance can drive green technology innovation, only high-quality green technology innovation (green invention patents) can significantly increase energy efficiency. The heterogeneity analysis reveals that green finance has a more significant effect on increasing energy efficiency in regions with large-scale economic development and weak environmental regulation. Furthermore, digital technology can amplify the driving effect of green finance on energy efficiency, and the higher the level of digital technology development, the greater the driving effect of green finance. The findings provide empirical evidence and policy implications for building a market-based green financial system and promoting green and efficient development in regions.

ABSTRACTThis research delves into firms' green innovation response to climate policy uncertainty (CPU). We distinguish green management innovation from green technological innovation and investigate the moderating effect of belonging to a high‐energy‐consuming industry and investors' climate attention. Based on Chinese A‐share listed firms in 2008–2022, we reveal a positive influence of CPU on green management innovation but a more limited effect on green technological innovation. However, firms' green technological innovation response is found to be more positive in the high‐energy‐consuming industry, and increased climate attention by investors strengthens CPU's facilitating effect on both green management and green technological innovation. In terms of longer‐term outcomes, we reveal that firms' participation in green technological innovation prompted by CPU significantly bolsters firms' competitive advantage. Our research offers novel insights into the inconsistent debate relationship between CPU and green innovation and influencing contextual factors.

The impact of booming China’s green finance on the quality of enterprises’ green innovation is still unexplored. Taking the 2017 pilot zones for green finance reform and innovation (PZGFRI) as a quasi-natural experiment, a triple difference model (DDD) is applied to examine the effect of green finance policy on heavy-polluting enterprises’ green innovation quality. Our empirical analysis indicates that PZGFRI plays a negative role in the quality of heavy-polluting enterprises’ green innovation, and the results remain robust when subjected to various robustness tests. Further examination of the mechanism reveals that the breeding of rent-seeking behavior and the crowding-out effect of research and development (R&D) are transmission channels for the inhibiting effect of PZGFRI on heavy-polluting enterprises’ green innovation quality. Finally, the heterogeneity analysis indicates that the negative effect of PZGFRI on heavy-polluting enterprises’ green innovation quality is more pronounced for private enterprises than for state-owned enterprises, and for green invention patents relative to utility models. This study sheds light on the promotion path of China’s green finance policy and enriches the research on green finance and green innovation.

This paper, grounded in the perspectives of green process innovation and green product innovation, examines how green finance policies influence the performance of green technology innovation in both high-polluting and low-polluting enterprises by altering their debt financing constraints. Additionally, it scrutinizes the influence of local government competition and intellectual property protection on this mechanism. The results show that the green finance pilot zone policy can improve the green innovation performance of polluting enterprises; green finance policies can promote green innovation by increasing the debt financing constraints of polluting enterprises. Local government competition can reduce the impact of green finance policies on the debt financing constraints and green innovation performance of polluting enterprises. Intellectual property protection can positively adjust the relationship between debt financing constraints and green innovation, as well as the relationship between policies and green innovation in green finance pilot zones. We hope that the aforementioned research will serve as a valuable resource for scholars and aid in making strategic decisions about green finance for enterprises.

Facing the intensification of global carbon emissions and the increasingly severe pressure of environmental pollution, listed companies urgently need to promote green innovation, achieve green transformation, and alleviate environmental problems. Green finance policy has played a significant role as a financial strategy for environmental governance in affecting green innovation level over the years. In this context, taking the green finance reform and innovation pilot zone (GFRIPZ) implemented in 2017 in China as a quasi-natural experiment, this paper analyzes the impact of green finance policy on green innovation level of listed companies by the difference-in-difference model. Based on the data of Chinese A-share listed companies from 2008 to 2020, the results of empirical analysis show that green finance significantly promotes green innovation of listed companies. The effect is profound on green utility model patents, but less pronounced on green invention patents. Among all these pilot zones, the policy effects of GFRIPZ ranked in descending order are Zhejiang, Guangdong, Jiangxi, Guizhou, and Xinjiang. In addition, green finance has a more significant impact on heavy-polluting industries, large and state-owned enterprises, and listed companies located in the eastern region. Furthermore, the effects of industry heterogeneity ranked in descending order are energy, manufacturing, processing, and engineering industry, while it is not obvious in the service industry. Mechanism analysis suggests that the effect is driven by a reduction in the cost of debt financing and an increase in the long-term debt ratio. The findings provide implications for policymakers to promote the level of green innovation and environmental governance. Therefore, policymakers should support the long-term creative development of green invention patents by reducing the cost of debt financing and increasing the long-term debt ratio and consider the heterogeneous characteristics of listed companies when formulating green finance policies.

The rapid industrialization and economic growth of South Asia have improved living standards but also exacerbated CO 2 emissions, intensifying the region's climate vulnerabilities. While existing literature has extensively examined green growth strategies in developed economies, few studies explore how green technological innovation, finance, and trade policies interact to shape emissions in South Asia, a region with distinct developmental challenges and high climate risks. This study investigates whether green energy adoption, technological innovation, and sustainable investments can decouple economic growth from emissions in South Asian economies from 1995 to 2022. Using second‐generation panel econometrics—accounting for cross‐sectional dependence and slope heterogeneity—along with AMG and CCEMG estimators, we assess long‐term relationships, supplemented by causal analysis, CuP‐FM and CuP‐BC for robustness. The results demonstrate that green technological innovation, green energy, and green finance significantly reduce CO 2 emissions, while trade liberalization increases them, likely due to carbon‐intensive export structures and weak environmental regulations, a critical finding for regional policymaking. Furthermore, green investment mitigates emissions but requires stronger institutional support to align with COP28 mandates and SDGs (7, 9, 11–13). This study contributes to the literature by addressing the gap in South Asia–specific green growth analyses, integrating COP28 resolutions into empirical policy recommendations, and demonstrating the underutilized potential of green finance and innovation in achieving carbon neutrality. The findings urge policymakers to prioritize sustainable infrastructure, reform trade policies to reduce emissions leakage, and scale targeted green investments to reconcile economic and environmental goals.

Digital finance provides a premises guarantee for green technology innovation, and effective environmental regulation helps to achieve green and sustainable development. This article selects Chinese urban panel data from 2011 to 2019 to explore the impact mechanism of the influence of digital finance and environmental regulation on the innovation capacity of green science and technology. It is found that extensive financing channels and the strong information-matching ability of digital finance have a significant promoting effect on local green science and technology innovation. Moreover, government environmental regulation not only facilitates the development of green technology innovation locally and in nearby regions, but also strengthens the utility of digital finance in driving green science and technology innovation. Further research found that the influence of digital finance and environmental regulation on the ability of green science and technology innovation has regional heterogeneity, and only digital finance in Central China can promote green science and technology innovation in both local and adjacent areas. Therefore, the government should continue to promote the development of digital finance, optimize environmental regulations by increasing environmental protection subsidies and creating a green innovation environment, and further stimulate willingness to innovate green technologies. At the same time, it is also important to note the coordinated development and governance with neighboring regional governments.

PurposeThis paper aims to explore the impact of green finance on the heterogeneity of enterprise green technology innovation and the underlying mechanism between them.Design/methodology/approachUsing the data of China's A-share listed enterprises from 2008 to 2020 and the fixed effect model, the authors empirically explore the relationship and mechanism between green finance and green technology innovation by constructing the green finance index while considering both the quality and quantity of innovation.FindingsThe study suggests that green finance is positively related to the quality and quantity of enterprise green technology innovation, while green finance is more effective in stimulating the quality of green technology innovation than quantity. In addition, alleviating financial mismatch and improving the quality of environmental information disclosure are core mechanisms during the process of green finance facilitating green technology innovation. Furthermore, green finance exerts a more positive effect on the quality and quantity of green technology innovation with large-size enterprises, heavily polluting industries and enterprises in the eastern region.Originality/valueThis paper enriches the literature on green finance and green technology innovation and provides practical significance for green finance implementation.