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Can Green Bonds Stimulate Green Innovation in Enterprises? Evidence from China

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  • Huacheng Rao

    (School of Economics and Management, Guangdong Technology College, Zhaoqing 526100, China)

  • Dongxu Chen

    (School of Economics and Management, Guangdong Technology College, Zhaoqing 526100, China
    Faculty of Business, City University of Macau, Macau 999078, China)

  • Feichao Shen

    (Business School, Hohai University, Nanjing 211100, China)

  • Yangyang Shen

    (School of Economics and Management, Guangdong Technology College, Zhaoqing 526100, China)

Abstract

Green innovation is the main driving force to improve green productivity and achieve green circular economy development. The existing literature has demonstrated extensively that government policies can promote green innovation in enterprises. However, there is much less literature exploring whether green finance policies can promote green innovation in enterprises. In this paper, we investigate the impact of corporate green bond issuance on green innovation in China’s listed companies. The findings indicate that the issue of green bonds by enterprises has had a positive and significant effect on the output of green patents. The effect is stronger for state-owned, large, and low-pollution enterprises. Furthermore, this positive effect is achieved by easing the financing constraints of the enterprise and has a dynamic and continuous impact. These results suggest green bonds stimulate green innovation by easing financing constraints, thereby promoting green transformation in a rapidly industrializing economy.

Suggested Citation

  • Huacheng Rao & Dongxu Chen & Feichao Shen & Yangyang Shen, 2022. "Can Green Bonds Stimulate Green Innovation in Enterprises? Evidence from China," Sustainability, MDPI, vol. 14(23), pages 1-19, November.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:23:p:15631-:d:982920
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    3. Wenqing Zhang & Jingrong Dong, 2023. "The Polarization Effect and Mechanism of China’s Green Finance Policy on Green Technology Innovation," Sustainability, MDPI, vol. 15(13), pages 1-26, June.

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