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Heterogeneous impact of green finance instruments on firms' green innovation novelty: Policy mix or mess?

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  • Guo, Rui
  • Zhang, Yujie
  • Chen, Kaihua
  • Wang, Yufei
  • Ning, Lutao

Abstract

A multitude of green finance instruments, such as green credit and green bond, have emerged to support firms' green innovation performance; however, the diverse impacts of these different instruments on firms' novelty in green innovation remain unclear. With a focus on knowledge recombination, we utilizes data from Chinese A-share listed manufacturing firms spanning the years 2010–2020 and employ the multinomial logit model to examine the differentiated as well as mixed effects of green credit and green bond instruments on firms' recombinant-oriented novelty of green innovation. The findings reveal that the green credit instrument simultaneously enhances the green innovation through recombinant reuse and creation. Conversely, the green bond instrument primarily promotes firms' green innovation through recombinant creation, while diminishing the green innovation based on recombinant reuse. The combination of both green finance instruments further advances the green innovation based on recombinant creation while reducing recombinant reuse. These findings have significant theoretical and practical implications for utilizing green finance instruments.

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  • Guo, Rui & Zhang, Yujie & Chen, Kaihua & Wang, Yufei & Ning, Lutao, 2025. "Heterogeneous impact of green finance instruments on firms' green innovation novelty: Policy mix or mess?," Energy Economics, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:eneeco:v:144:y:2025:i:c:s0140988325001380
    DOI: 10.1016/j.eneco.2025.108315
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