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From financing to innovation: How green bond issuance promotes corporate green innovation in China

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  • Zhang, Zhi Min
  • Jiang, Feng

Abstract

This study investigates the impact of green bond issuance on corporate green innovation using a difference-in-differences (DID) approach. By analyzing data from 2013 to 2023 from China A-share publicly listed firms, the study explores how green bond issuance influences various dimensions of green innovation, including innovation level, quality, and quantity, measured by the number of granted green patents, green invention patents, and green utility model patents. The results show that green bond issuance significantly promotes green innovation, with firms exhibiting notable increases in all three measures. The findings remain robust after controlling for potential confounding factors, excluding data post-2019 to mitigate the effects of the COVID-19 pandemic, and excluding municipalities with unique economic characteristics. This study highlights the potential of green bonds to enhance corporate green innovation and contributes to the growing body of research on sustainable finance.

Suggested Citation

  • Zhang, Zhi Min & Jiang, Feng, 2025. "From financing to innovation: How green bond issuance promotes corporate green innovation in China," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325017167
    DOI: 10.1016/j.frl.2025.108462
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    Keywords

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L8 - Industrial Organization - - Industry Studies: Services
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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