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Green Finance and Regional Technological Innovation in China: The Mediating Role of R&D Investment

Author

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  • Ading Li

    (Faculty of Economics, Srinakharinwirot University, Bangkok 10110, Thailand)

  • Adul Supanut

    (Faculty of Economics, Srinakharinwirot University, Bangkok 10110, Thailand)

  • Jianxu Liu

    (School of Economics, Shandong University of Finance and Economics, Jinan 250000, China)

Abstract

In light of global initiatives aimed at promoting sustainability and low-carbon growth, this research investigates how green finance affects regional technological innovation in China, specifically highlighting the mediating effect of R&D investment. Utilizing panel data from 30 provinces in China from 2008 to 2021, we apply fixed-effects and mediation models to explore these relationships. The results indicate a strong positive link between green finance and regional technological innovation, with R&D investment acting as a partial mediator. Furthermore, the capabilities for regional innovation and entrepreneurship enhance the influence of green finance on R&D investment. However, in areas with greater innovation and entrepreneurship capabilities, the additional effect of R&D investment tends to decrease. Based on these results, the study proposes targeted policy recommendations, including enhancing green finance policies, improving financial institution services, promoting enterprise-led R&D activities, and fostering regional collaboration to achieve balanced innovation development. These insights provide both theoretical and practical significance for leveraging green finance to advance sustainable innovation.

Suggested Citation

  • Ading Li & Adul Supanut & Jianxu Liu, 2025. "Green Finance and Regional Technological Innovation in China: The Mediating Role of R&D Investment," IJFS, MDPI, vol. 13(2), pages 1-26, May.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:2:p:78-:d:1649606
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    References listed on IDEAS

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    1. Xu, Liangguo & Shu, Haicheng & Lu, Xianglin & Li, Tianci, 2024. "Regional technological innovation and industrial upgrading in China: An analysis using interprovincial panel data from 2008 to 2020," Finance Research Letters, Elsevier, vol. 66(C).
    2. Liu, Yaobin & Deng, Weifeng & Wen, Huwei & Li, Shuoshuo, 2024. "Promoting green technology innovation through policy synergy: Evidence from the dual pilot policy of low-carbon city and innovative city," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 957-977.
    3. Dirk Schoenmaker & Rens Van Tilburg, 2016. "What Role for Financial Supervisors in Addressing Environmental Risks?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(3), pages 317-334, September.
    4. Geddes, Anna & Schmidt, Tobias S. & Steffen, Bjarne, 2018. "The multiple roles of state investment banks in low-carbon energy finance: An analysis of Australia, the UK and Germany," Energy Policy, Elsevier, vol. 115(C), pages 158-170.
    5. Lei Li & Xiaoyu Ma & Shaojun Ma & Feng Gao, 2024. "Role of green finance in regional heterogeneous green innovation: Evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
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