The Impact of the Green Finance Reform and Innovation Pilot Zone on the Green Innovation-Evidence from China

This article uses the Green Finance Reform and Innovation Pilot Zone promulgated in 2017 as an example to construct a quasi-natural experiment and uses the difference-in-difference method to test the impact of the implementation of the Green Finance Reform and Innovation Pilot Zone on the green innovation activities. It was found that the policy promotes the quantity and quality of corporate green innovation. The mechanism test showed that policy promotes the R&D investment and expands the credit scale. The study further found that green finance policies enhance the green innovation of enterprises as government environmental regulation is strengthened. Finally, green innovation by state-owned enterprises is more strongly promoted in the pilot green finance reform and innovation zones, and green innovation by enterprises in non-polluting sectors is more sensitive to the policy, with a heterogeneous pattern of policy effects in eastern and non-eastern China. Therefore, green finance policies should be promoted to achieve an effective combination of financial resource allocation and corporate green innovation to promote the construction of ecological civilization.

Automated summary

This article uses the example of the Green Finance Reform and Innovation Pilot Zone to examine its impact on green innovation activities. The study finds that the policy promotes both the quantity and quality of corporate green innovation. Furthermore, it is found that the policy achieves this through mechanisms such as increased R&D investment and expanded credit. The study also highlights the stronger promotion of green innovation by state-owned enterprises in the pilot zone and the differential effects of the policy in different regions of China.