How does technology finance improve enterprises’ sustainable development capabilities? Evidence from China’s A-share listed companies

Technology Finance (TF) development has a pivotal influence on strengthening enterprises’ sustainable development capabilities. While academic interest in this field has grown, empirical evidence on the mechanisms through which TF influences sustainability remains limited, particularly for China’s A-share listed non-financial petroleum and petrochemical companies. This study addresses this gap by proposing four research hypotheses and examining the impact of TF on firms’ sustainable growth rate (SGR). The analysis using panel data from 5212 firms between 2011 and 2021, confirms a significant positive relationship between TF and SGR, which remains robust following multiple tests, including heterogeneity and endogeneity analyses. Results reveal that the strength of this relationship varies based on regional development and firm ownership, with stronger effects in central China and for state-owned enterprises. Moreover, we verify mediating mechanisms of alleviating financing constraints and promoting technological innovation. The positive influence of TF on SGR persists after employing the instrumental variable technique to address endogeneity concerns. This study enriches the limited empirical literature and provides policy insights for promoting healthy TF development to advance sustainability in China’s energy-intensive industries.