Nexus between green finance development and green technological innovation: A potential way to achieve the renewable energy transition

Green innovation is a feasible and potential option that governments can adopt to reduce reliance on fossil fuels and speed the transition to renewable energy sources. This study analyzes the relationship between green finance development and green innovation using listed Chinese companies to investigate the role of green finance. In the preliminary analysis, it employs Poisson and negative binomial distributions based on the sample characteristics. The additional research considers enterprises' internal and external characteristics and adds a zero-inflated factor with enterprise-scale and bank competition. Our main findings suggest that green finance positively improves green technological innovation, and zero-inflated factors can significantly lower the possibility of enterprises refusing to engage in green innovation. By using a representative green finance policy in 2012 as a quasi-natural experiment, this paper also demonstrates the promoting effect of green finance development. The above results are still valid by the robustness test. Furthermore, this paper applies the panel threshold model and finds that the enterprise scale and bank competition not only affect the choice of the enterprise but also stimulate the promotion intensity in different development stages. This paper contributes to targeted policy implications for the renewable energy transition.

Automated summary

This study analyzes the relationship between green finance development and green innovation using listed Chinese companies. The findings suggest that green finance positively improves green technological innovation, and factors like zero-inflation can lower the possibility of enterprises refusing to engage in green innovation. The study also shows that enterprise scale and bank competition can affect the choice of the enterprise and stimulate promotion intensity in different development stages.