The Role of the Government in Green Finance, Foreign Direct Investment, Technological Innovation, and Industrial Structure Upgrading: Evidence from China

This study utilizes data from China's 31 provinces, collected from 2007 to 2021, to establish a green finance (GF) index and investigate its impact on industrial structure upgrading (IS). In addition to the direct impact, this study investigates the indirect influence of GF on industrial structure upgrading through technological innovation (Tech) and foreign direct investment (FDI). Furthermore, this study analyzes the moderating role of environmental regulation intensity (ERI) and government intervention on the relationship between GF and industrial structure upgrading. The empirical findings demonstrate a positive relationship between GF and industrial structure upgrading, which remains robust after conducting a robustness analysis and stability tests. Moreover, GF positively impacts industrial structure upgrading by stimulating Tech and attracting FDI. Furthermore, the ERI is observed to positively and significantly moderate the impact of GF on industrial structure upgrading, while high levels of government intervention hinder the promoting effect of GF on industrial structure upgrading. Lastly, the association between GF development and industrial structure upgrading exhibits regional and market heterogeneity, with the most notable impact observed in coastal areas and regions with higher levels of market orientation. This study presents comprehensive suggestions for facilitating the improvement of GF and the upgrading of industrial structures.