Can green finance promote green technology innovation in enterprises: empirical evidence from China

Green technology innovation is a crucial step in China's transition towards a green economy and has received substantial financial support through green finance. However, China's efficacy in using green finance to serve enterprise green technology innovation is still at an exploratory stage. This study takes the 2017 policy of the Chinese government on "Green Finance Reform and Innovation Pilot Zones" as a quasi-natural experiment and constructs a difference-in-difference model to examine the impact of green finance on enterprise green technology innovation. The research results reveal that green financial policies significantly promote green technology innovation and have an incentive effect on the application of green invention patents and green utility model patents, with this conclusion being robust. This is particularly true for large-scale enterprises, state-owned enterprises, and non-heavy polluting enterprises. Compared to large-scale enterprises, state-owned enterprises, and non-heavy-polluting enterprises are more inclined to apply for green invention patents. Inspection of influence mechanisms suggests that green finance policies alleviate financing constraints and signaling effect to improve enterprises' green innovation, whereas external market supervision is ineffective. Based on empirical results, relevant policy suggestions are proposed to help green finance better serve enterprises' green innovation.