IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v96y2024ipbs1057521924006057.html
   My bibliography  Save this article

Green finance and innovative cities: Dual-pilot policies and collaborative green innovation

Author

Listed:
  • Hou, Guanchong
  • Shi, Guifen

Abstract

As the impacts of climate change intensify, urban green innovation has emerged as a critical technological approach for reducing carbon emissions and addressing climate-related risks. In this study, we analyze data from 282 prefecture-level cities in China from 2007 to 2020. Using the time-varying difference-in-difference model, we examine the underlying mechanisms of how green finance and urban innovation policies synergistically drive urban green innovation. Our findings reveal that the dual-pilot policies, namely, Green Finance Reform and Innovation Pilot Zones and Innovative Cities Pilots, have significantly boosted green innovation by leveraging the resource allocation effect. Further research shows that the green innovation is more effective in the central and eastern regions, cities facing resource decline, cities regenerating resource-, and rust-belt areas during the dual-pilot policy implementation process. Moreover, these dual-pilot policies demonstrate a synergy of “1 + 1 > 2.” These results offer fresh insight into further deepening urban policy pilot initiatives.

Suggested Citation

  • Hou, Guanchong & Shi, Guifen, 2024. "Green finance and innovative cities: Dual-pilot policies and collaborative green innovation," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    • Handle: RePEc:eee:finana:v:96:y:2024:i:pb:s1057521924006057
    DOI: 10.1016/j.irfa.2024.103673
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521924006057
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2024.103673?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Du, Gang & Yu, Meng & Sun, Chuanwang & Han, Zhao, 2021. "Green innovation effect of emission trading policy on pilot areas and neighboring areas: An analysis based on the spatial econometric model," Energy Policy, Elsevier, vol. 156(C).
    2. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    3. Thorsten Beck & Ross Levine & Alexey Levkov, 2010. "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States," Journal of Finance, American Finance Association, vol. 65(5), pages 1637-1667, October.
    4. Wang, Juxian & Ma, Mengdi & Dong, Tianyi & Zhang, Zheyuan, 2023. "Do ESG ratings promote corporate green innovation? A quasi-natural experiment based on SynTao Green Finance's ESG ratings," International Review of Financial Analysis, Elsevier, vol. 87(C).
    5. Wu, Nan & Zhang, Zuopeng & Lin, Boqiang, 2024. "Responses of financial stress and monetary policy to global warming: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 92(C).
    6. Wang, Qunwei & Fan, Zining, 2023. "Green finance and investment behavior of renewable energy enterprises: A case study of China," International Review of Financial Analysis, Elsevier, vol. 87(C).
    7. Jia, Junsheng & He, Xiaoyu & Zhu, Taiyu & Zhang, Eryu, 2023. "Does green finance reform promote corporate green innovation? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    8. Cheng, Xiaoqiang & Yao, Dingjun & Qian, Yuanyuan & Wang, Bin & Zhang, Deliang, 2023. "How does fintech influence carbon emissions: Evidence from China's prefecture-level cities," International Review of Financial Analysis, Elsevier, vol. 87(C).
    9. Hua Zhang & Chenyi Kang & Chao Feng, 2024. "From Innovation to Green: Does China’s Innovative City Construction Contribute to Green Development?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 60(11), pages 2497-2532, September.
    10. Charles R. Shipan & Craig Volden, 2008. "The Mechanisms of Policy Diffusion," American Journal of Political Science, John Wiley & Sons, vol. 52(4), pages 840-857, October.
    11. Ewens, Michael & Gorbenko, Alexander & Korteweg, Arthur, 2022. "Venture capital contracts," Journal of Financial Economics, Elsevier, vol. 143(1), pages 131-158.
    12. Mingyong Lai & Jiayu Fang & Rui Xie, 2024. "Does regional innovation policy encourage firm indigenous innovation? Evidence from a quasi-natural experiment of the pilot project of innovative cities in China," Applied Economics, Taylor & Francis Journals, vol. 56(15), pages 1817-1833, March.
    13. Mingzhe Yu & Qiang Zhou & Mui Yee Cheok & Jakub Kubiczek & Nadeem Iqbal, 2022. "Does green finance improve energy efficiency? New evidence from developing and developed economies," Economic Change and Restructuring, Springer, vol. 55(1), pages 485-509, February.
    14. van den Heuvel, Matthias & Popp, David, 2023. "The role of venture capital and governments in clean energy: lessons from the first cleantech bubble," Energy Economics, Elsevier, vol. 124(C).
    15. Zhuo Wang & Muhammad Sadiq Shahid & Nguyen Binh An & Mohsin Shahzad & Zulkiflee Abdul-Samad, 2022. "Does green finance facilitate firms in achieving corporate social responsibility goals?," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 5400-5419, December.
    16. Sayantan Khanra & Puneet Kaur & Rojers P Joseph & Ashish Malik & Amandeep Dhir, 2022. "A resource‐based view of green innovation as a strategic firm resource: Present status and future directions," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1395-1413, May.
    17. Stucki, Tobias & Woerter, Martin & Arvanitis, Spyros & Peneder, Michael & Rammer, Christian, 2018. "How different policy instruments affect green product innovation: A differentiated perspective," Energy Policy, Elsevier, vol. 114(C), pages 245-261.
    18. Song, Malin & Peng, Licheng & Shang, Yuping & Zhao, Xin, 2022. "Green technology progress and total factor productivity of resource-based enterprises: A perspective of technical compensation of environmental regulation," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    19. Shoulin Pang & Shiting Dou & Huan Li, 2020. "Synergy effect of science and technology policies on innovation: Evidence from China," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-19, October.
    20. Zhang, Yijun & Li, Xiaoping & Song, Yi & Jiang, Feitao, 2021. "Can green industrial policy improve total factor productivity? Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 51-62.
    21. Chungwon Woo & Yanghon Chung & Dongphil Chun & Seunghun Han & Dukhee Lee, 2014. "Impact of Green Innovation on Labor Productivity and its Determinants: an Analysis of the Korean Manufacturing Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 23(8), pages 567-576, December.
    22. Samuel Wicki & Erik G. Hansen, 2019. "Green technology innovation: Anatomy of exploration processes from a learning perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 28(6), pages 970-988, September.
    23. Yin, Xiuling & Xu, Zhaoran, 2022. "An empirical analysis of the coupling and coordinative development of China's green finance and economic growth," Resources Policy, Elsevier, vol. 75(C).
    24. Marchesani, Filippo & Masciarelli, Francesca & Bikfalvi, Andrea, 2023. "Smart city as a hub for talent and innovative companies: Exploring the (dis) advantages of digital technology implementation in cities," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    25. Zhang, Lixia & Sun, Huaping & Pu, Tianlong & Sun, Hui & Chen, Zhenling, 2024. "Do green finance and hi-tech innovation facilitate sustainable development? Evidence from the Yangtze River Economic Belt," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1430-1442.
    26. Oughton, Christine & Landabaso, Mikel & Morgan, Kevin, 2002. "The Regional Innovation Paradox: Innovation Policy and Industrial Policy," The Journal of Technology Transfer, Springer, vol. 27(1), pages 97-110, January.
    27. Gema Albort-Morant & Antonio Leal-Millán & Gabriel Cepeda-Carrion & Jörg Henseler, 2018. "Developing green innovation performance by fostering of organizational knowledge and coopetitive relations," Review of Managerial Science, Springer, vol. 12(2), pages 499-517, March.
    28. Davis, Lance & North, Douglass, 1970. "Institutional Change and American Economic Growth: A First Step Towards a Theory of Institutional Innovation," The Journal of Economic History, Cambridge University Press, vol. 30(1), pages 131-149, March.
    29. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lei, Hao & Gao, Renyuan & Ning, Chutong & Sun, Guanglin, 2025. "Green finance and corporate green innovation," Finance Research Letters, Elsevier, vol. 72(C).
    2. Li, Lu & Gan, Yufei & Bi, Shuochen & Fu, Haokai, 2025. "Substantive or strategic? Unveiling the green innovation effects of pilot policy promoting the integration of technology and finance," International Review of Financial Analysis, Elsevier, vol. 97(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Huizong & Hao, Yulong & Fu, Qiang, 2024. "Data factor agglomeration and urban green finance: A quasi-natural experiment based on the National Big Data Comprehensive Pilot Zone," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    2. Ma, Li & Li, Danna, 2024. "Would macro policy promote green and low-carbon transformation of energy companies?," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    3. Cai, Xiaotong & Lin, Peiyang & Wang, Rui, 2025. "Intelligent manufacturing and corporate green transformation," International Review of Financial Analysis, Elsevier, vol. 97(C).
    4. Cheng, Zhen & Ding, Chante Jian & Zhao, Kunqian, 2025. "Energy use rights trading and carbon emissions," Energy, Elsevier, vol. 315(C).
    5. Zhang, Zhaoting & Zhang, Lei, 2024. "Government green procurement policies and corporate green total factor productivity," Finance Research Letters, Elsevier, vol. 65(C).
    6. Peng, Changhong & Chen, Dongjing & Jia, Daizheng & Liu, Qiao & Xu, Xin, 2025. "Can green credit policies reduce enterprise risk? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 97(C).
    7. Zhang, Liyuan & Luo, Zhenqing & Yu, Xiaoyuan & Yang, Qiming & Wang, Jiancong, 2025. "Economic policy uncertainty and corporate green innovation," International Review of Financial Analysis, Elsevier, vol. 97(C).
    8. Qi, Xiulin & Wu, Zhifang & Xu, Jinqing & Shan, Biaoan, 2023. "Environmental justice and green innovation: A quasi-natural experiment based on the establishment of environmental courts in China," Ecological Economics, Elsevier, vol. 205(C).
    9. Wu, Jiaxi & Wang, Shali & Zhang, Rui & Zhao, Meilin & Sun, Xialing & Qie, Xiaotong & Wang, Yue, 2025. "Measurement of green innovation efficiency in Chinese listed energy-intensive enterprises based on the three stage Super-SBM model," International Review of Economics & Finance, Elsevier, vol. 97(C).
    10. Hu, Haichuan & Jia, Zhenting & Yang, Siyao, 2025. "Exploring FinTech, green finance, and ESG performance across corporate life-cycles," International Review of Financial Analysis, Elsevier, vol. 97(C).
    11. Liu, Yanqiong & Li, Xiaoling, 2025. "Green finance policies, resource allocation, and corporate social responsibility," Finance Research Letters, Elsevier, vol. 71(C).
    12. Sheng, Jichuan & Ding, Rui & Yang, Hongqiang, 2024. "Corporate green innovation in an aging population: Evidence from Chinese listed companies," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    13. Lee, Chi-Chuan & Li, Mingyue & Li, Xinghao & Song, Hepeng, 2025. "More green digital finance with less energy poverty? The key role of climate risk," Energy Economics, Elsevier, vol. 141(C).
    14. Li, Yu & Yaacob, Mohd Hasimi & Xie, Tao, 2024. "Effects of China's low carbon pilot city policy on corporate green innovation: Considering the mediating role of public environmental concern," Finance Research Letters, Elsevier, vol. 65(C).
    15. Liu, Xiaoqian & Wang, Chang'an & Wu, Haitao & Yang, Cunyi & Albitar, Khaldoon, 2023. "The impact of the new energy demonstration city construction on energy consumption intensity: Exploring the sustainable potential of China's firms," Energy, Elsevier, vol. 283(C).
    16. He, Yu & Zhu, Xiaobo & Zheng, Huan, 2022. "The influence of environmental protection tax law on total factor productivity: Evidence from listed firms in China," Energy Economics, Elsevier, vol. 113(C).
    17. Zhou, Kuo & Luo, Haotian & Qu, Zhi, 2023. "What can the environmental rule of law do for environmental innovation? Evidence from environmental tribunals in China," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    18. Wang, Pei & Xue, Weixian & Wang, Zhuan, 2024. "Fog and haze control and enterprise green total factor productivity - evidence from China," Finance Research Letters, Elsevier, vol. 65(C).
    19. Ren, Shenggang & Yang, Xuanyu & Hu, Yucai & Chevallier, Julien, 2022. "Emission trading, induced innovation and firm performance," Energy Economics, Elsevier, vol. 112(C).
    20. Wang, Hong & Hu, Xuechen & Li, Hailing, 2023. "Regional production restriction policy and firms’ green transition: Evidence from Beijing-Tianjin-Hebei region," Energy, Elsevier, vol. 282(C).

    More about this item

    Keywords

    Green finance reform and innovation pilot zones; Innovative city pilots; Green innovation; Time-varying DID model;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finana:v:96:y:2024:i:pb:s1057521924006057. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620166 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.