Green finance and green innovation: Theoretical analysis based on game theory and empirical evidence from China

By applying evolutionary game analysis and using a panel of Chinese listed companies, this paper concludes that green finance has a significant role in promoting green innovation from both theoretical and empirical aspects. After using alternative measurement and estimation methods of the core variables, the above conclusions are still robust. In addition, considering the endogeneity, this paper regards the establishment of the pilot zones for green finance reform and innovations as a quasi-natural experiment. It analyzes the policy effect of green finance policy on green innovation by applying the Differences-in-Differences model, as the conclusion is consistent with the above. Finally, this paper takes micro-level evidence to investigate the impact of corporate risk-taking on the relationship between green finance and green innovation. Evidence from this study suggests that green finance has a stronger positive effect on green innovation when firms have a lower risk-taking level. These results have certain practical significance for guiding coordinated development and low-carbon transition.