IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v85y2025ipcs1544612325013790.html

Green innovation and maturity mismatch: Evidence from China

Author

Listed:
  • Zhang, Liqin
  • Sun, Xiao
  • Guo, Wei
  • Sun, Ruiqi

Abstract

Green innovation is essential for sustainable development but poses new challenges for financial management, especially in aligning investment and financing horizons. While extant studies focus on its environmental and operational benefits, its financial impact remains underexplored. Using data from Chinese listed firms from 2007 to 2023, we study the effect of green innovation on debt maturity mismatch. We find that green innovation exacerbates maturity mismatch by altering investment and financing structures, increasing risk, and heightening return uncertainty. The effect is stronger in firms reliant on bank debt and in competitive industries. These findings reveal a hidden financial risk of green innovation and offer insights for designing supportive financial policies.

Suggested Citation

  • Zhang, Liqin & Sun, Xiao & Guo, Wei & Sun, Ruiqi, 2025. "Green innovation and maturity mismatch: Evidence from China," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013790
    DOI: 10.1016/j.frl.2025.108124
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325013790
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.108124?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Fatemi, Ali & Glaum, Martin & Kaiser, Stefanie, 2018. "ESG performance and firm value: The moderating role of disclosure," Global Finance Journal, Elsevier, vol. 38(C), pages 45-64.
    2. Meng, Qingbin & Peng, Tong & Song, Xuan & Wang, Song, 2024. "Green innovation and IPO return: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 660-677.
    3. Liu, Xiaojing & Huang, Ningren & Su, Wunhong & Zhou, Haiyan, 2024. "Green innovation and corporate ESG performance: Evidence from Chinese listed companies," International Review of Economics & Finance, Elsevier, vol. 95(C).
    4. Philippe Aghion & Jing Cai & Mathias Dewatripont & Luosha Du & Ann Harrison & Patrick Legros, 2022. "Industrial Policy and Competition," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 15, pages 349-380, World Scientific Publishing Co. Pte. Ltd..
    5. Xie, Xuemei & Han, Yuhang & Hoang, Thu Thao, 2022. "Can green process innovation improve both financial and environmental performance? The roles of TMT heterogeneity and ownership," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    6. Bleakley, Hoyt & Cowan, Kevin, 2010. "Maturity mismatch and financial crises: Evidence from emerging market corporations," Journal of Development Economics, Elsevier, vol. 93(2), pages 189-205, November.
    7. Xiang, Xiaojian & Liu, Chuanjiang & Yang, Mian, 2022. "Who is financing corporate green innovation?," International Review of Economics & Finance, Elsevier, vol. 78(C), pages 321-337.
    8. Dong, Xiao & Yu, Mingzhe, 2024. "Green bond issuance and green innovation: Evidence from China's energy industry," International Review of Financial Analysis, Elsevier, vol. 94(C).
    9. Chen, Qianqian, 2024. "From concept to capital: Investigating the influence of green innovation on equity financing in BRICS economies," International Review of Financial Analysis, Elsevier, vol. 93(C).
    10. Chen, Yan & Sun, Ruiqi, 2023. "Corporate financialization and the long-term use of short-term debt: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PD).
    11. Provaty, Sagira Sultana & Amin, Shabnaz & Hasan, Mostafa Monzur, 2022. "Strategic deviation and debt maturity structure," Finance Research Letters, Elsevier, vol. 50(C).
    12. Matthias Nnadi & Vachiraporn Surichamorn & Ranadeva Jayasekera & Yacine Belghitar, 2022. "Empirical analysis of debt maturity, cash holdings and firm investment in developing economies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3345-3372, July.
    13. Jennie Bai & Arvind Krishnamurthy & Charles†Henri Weymuller, 2018. "Measuring Liquidity Mismatch in the Banking Sector," Journal of Finance, American Finance Association, vol. 73(1), pages 51-93, February.
    14. Li, Lu & Zhou, Shiqi & Xu, Wei & Dai, Jiapeng, 2024. "Green innovation's impact on corporate financing: New insights from BRICS economies," Finance Research Letters, Elsevier, vol. 62(PB).
    15. Awartani, Basel & Belkhir, Mohamed & Boubaker, Sabri & Maghyereh, Aktham, 2016. "Corporate debt maturity in the MENA region: Does institutional quality matter?," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 309-325.
    Full references (including those not matched with items on IDEAS)

    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. Cui, Wenjing, 2025. "Green management innovation, supply chain finance capabilities, and corporate green innovation performance," Finance Research Letters, Elsevier, vol. 85(PD).
    2. Li, Ruitao & Malik, Ihtisham & Xiong, Zhengling & Guo, Shijun, 2025. "Do IPOs affect green innovation? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).
    3. Zhao, Xinlu & Zhang, Huixue, 2024. "How does ESG performance determine the level of specific financing in capital structure? New insights from China," International Review of Financial Analysis, Elsevier, vol. 95(PC).
    4. Wu, Saijun & Li, Changzheng & Huang, Fei & Yu, Qing, 2025. "Exploration of the relationship between equity financing dependence, financing constraints, and corporate innovation performance," Finance Research Letters, Elsevier, vol. 76(C).
    5. Lou, Chao & Xie, Shaojing, 2025. "Innovation in external supervision systems, business environment, and corporate financialization: a quasi-natural experiment based on the pilot program of prosecutorial administrative public interest litigation system," Finance Research Letters, Elsevier, vol. 86(PA).
    6. Yang, Yanwu & Ren, Haili & Liu, Yutong & Yang, Yusen, 2025. "Integration of technology and finance, digital transformation and corporate green innovation," Finance Research Letters, Elsevier, vol. 71(C).
    7. Wang, Yao, 2025. "Greenwashing or green evolution: Can transition finance empower green innovation in carbon-intensive enterprise?," International Review of Financial Analysis, Elsevier, vol. 97(C).
    8. Qin, Lu & Chen, Chunchun & Chen, Yan & Su, Yanzhi, 2024. "Digital financial inclusion, analyst attention, and the green innovation in energy firms," Finance Research Letters, Elsevier, vol. 67(PB).
    9. Liu, Xiaojing & Huang, Ningren & Su, Wunhong & Zhou, Haiyan, 2024. "Green innovation and corporate ESG performance: Evidence from Chinese listed companies," International Review of Economics & Finance, Elsevier, vol. 95(C).
    10. Zhang, Jingxuan & Wu, Yanghui & Lin, Lin, 2025. "Government subsidies, corporate ESG ratings, and green innovation," Finance Research Letters, Elsevier, vol. 84(C).
    11. Huang, Ming & Wang, Xiaoxiao & Wang, Xuewu & Zhang, Qunzi, 2024. "Carbon risk and corporate maturity mismatch," Journal of International Money and Finance, Elsevier, vol. 149(C).
    12. Liu, Cai & He, Xiaoxiao, 2025. "The unintended consequences of retail investor attention: the case of the long-term use of short-term debt," Finance Research Letters, Elsevier, vol. 82(C).
    13. LI, Mingyu & ZHANG, Xindong & QIAO, Minru, 2024. "Mispricing and debt maturity structure," Finance Research Letters, Elsevier, vol. 67(PB).
    14. Chunlian Zhang & Danni Chen, 2023. "Do environmental, social, and governance scores improve green innovation? Empirical evidence from Chinese-listed companies," PLOS ONE, Public Library of Science, vol. 18(5), pages 1-24, May.
    15. Li, Yuanyuan & Zhang, Yindan & Chen, Chen, 2025. "Enterprise digital transformation, government subsidies, and green innovation performance," Finance Research Letters, Elsevier, vol. 81(C).
    16. Wen, Cui-Ping & Wang, Kai-Hua & Su, Chi-Wei & Li, Xin & Wang, Zu-Shan, 2025. "Navigating China's green bonds: Insights from cryptocurrency price, oil price, and economic policy uncertainty," International Review of Economics & Finance, Elsevier, vol. 102(C).
    17. Wang, Yizhong & Wang, Ting & Chen, Lifang, 2021. "Maturity mismatches of Chinese listed firms," Pacific-Basin Finance Journal, Elsevier, vol. 70(C).
    18. ZHANG,Hongyong & CHENG,Wenyin & LIANG,David Tao & Meng,Bo, 2024. "Industrial Subsidies along Domestic Value Chains and their Impacts on China’s Exports," IDE Discussion Papers 937, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    19. Fengxue Yin & Yanling Xiao & Rui Cao & Jianhua Zhang, 2023. "Impacts of ESG Disclosure on Corporate Carbon Performance: Empirical Evidence from Listed Companies in Heavy Pollution Industries," Sustainability, MDPI, vol. 15(21), pages 1-19, October.
    20. Xiaojuan Hou & Ming Jin, 2025. "Characteristics of executives’ education and corporate sustainability: evidence from disclosure of environmental, social, and governance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(11), pages 28241-28279, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    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:finlet:v:85:y:2025:i:pc:s1544612325013790. 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/frl .

    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.