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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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    References listed on IDEAS

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    Cited by:

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    2. Bao, Junsong & Yang, Liuyi, 2025. "Will ESG disclosure affect the green innovation level of SMEs?," Finance Research Letters, Elsevier, vol. 83(C).
    3. Dutordoir, Marie & Li, Shuyu & Neto, João Quariguasi Frota, 2025. "When green is no longer a win - new evidence on the shareholder value effects of green bond offerings11The authors would like to thank Konstantinos Bozos, Samit Gupta, Antony Potter, Hai-Anh Tran, and participants at the 2023 British Academy of Manag," International Review of Financial Analysis, Elsevier, vol. 107(C).
    4. Tao, Chenlu & Cheng, Baodong & Liao, Zhilin & Wei, Zhuoran & Chen, Fawei & Yu, Chang, 2025. "The impact of carbon emissions trading policy on green innovation of export enterprises: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 88(C), pages 1922-1938.
    5. Yang, Chen & Hu, Zongyi, 2026. "Data element resource supply and enterprise green innovation quality," International Review of Financial Analysis, Elsevier, vol. 109(C).
    6. Zhang, Fan & Li, Shaodong, 2025. "Green innovation, executives’ environmental awareness, and corporate value chain upgrading," Finance Research Letters, Elsevier, vol. 86(PD).
    7. Yin, Liang & Tan, Yujie & Liu, Qian & Gao, Peng, 2026. "Do SOE business groups spur green innovation? A-share evidence from China," Finance Research Letters, Elsevier, vol. 90(C).

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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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