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Impact of Green Finance on Regional Green Innovation Performance

Author

Listed:
  • Xin Jin

    (School of Information, Central University of Finance and Economics, Beijing 100098, China
    Engineering Research Center of State Financial Security (Ministry of Education), Central University of Finance and Economics, Beijing 100098, China)

  • Chunwu Chen

    (School of Information, Central University of Finance and Economics, Beijing 100098, China)

  • Yuanheng Li

    (School of Information, Central University of Finance and Economics, Beijing 100098, China
    Engineering Research Center of State Financial Security (Ministry of Education), Central University of Finance and Economics, Beijing 100098, China)

  • Yinan Yu

    (School of Information, Central University of Finance and Economics, Beijing 100098, China
    Engineering Research Center of State Financial Security (Ministry of Education), Central University of Finance and Economics, Beijing 100098, China)

Abstract

Green finance (GF) is a new financial service that supports green and low-carbon (GLC) transformation. Whether green finance (GF) can effectively improve regional green innovation performance (GIP) by optimizing resource allocation and increasing factor input is a key question for achieving sustainable development goals (SDGs): environmental, economic, and society. Based on panel data from 30 provinces in China from 2007 to 2021, this paper explores the impact of GF on GIP and analyzes the mechanisms of the effect. The findings of this paper indicate that GF plays a significantly positive role in promoting regional GIP, increasing both quantity and quality. Heterogeneity analysis reveals that GF has a considerable incentive effect on carbon reduction technology, and the innovation incentive effect of GF is much greater in regions where the attention paid to the environment is high or there is a low natural endowment. Mechanism analysis reveals GF improves GIP by optimizing financial resource allocation and increasing R&D factor input. Therefore, this paper proposes the following suggestions: (1) The central government should improve the top-level design of the GF policy system and provide financial support for GLC transformation and the achievement of SDGs. (2) Local governments should explore diversified development paths for GF according to their own characteristics, stimulate market entities’ enthusiasm for GLC transformation, and improve regional green innovation performance so as to achieve coordinated and sustainable development of the environment, economy, and society.

Suggested Citation

  • Xin Jin & Chunwu Chen & Yuanheng Li & Yinan Yu, 2024. "Impact of Green Finance on Regional Green Innovation Performance," Sustainability, MDPI, vol. 16(23), pages 1-15, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10519-:d:1533700
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    References listed on IDEAS

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    1. Xu, Yang & Liu, Xia & Yang, Liu & Yang, Xiaodong & Yan, Hongchuan & Ran, Qiying, 2023. "Exploring the impact of natural resource dependence on green technology innovation: New insights from China," Resources Policy, Elsevier, vol. 86(PA).
    2. Lv, Chengchao & Shao, Changhua & Lee, Chien-Chiang, 2021. "Green technology innovation and financial development: Do environmental regulation and innovation output matter?," Energy Economics, Elsevier, vol. 98(C).
    3. Auty, R. & Warhurst, A., 1993. "Sustainable development in mineral exporting economies," Resources Policy, Elsevier, vol. 19(1), pages 14-29, March.
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    Cited by:

    1. Fan, Zhenqi & Cui, Jie & Wu, Wenjing, 2026. "Spatial spillover effect of green credit on carbon emission intensity in China: The role of high-quality productive forces," Economic Modelling, Elsevier, vol. 154(C).
    2. Lingui Qin & Songqi Liu & Fengjie Xie, 2025. "Green Finance and Green Total Factor Productivity: Impact Mechanisms, Threshold Characteristics, and Spatial Effects," SAGE Open, , vol. 15(2), pages 21582440251, June.
    3. Yahui Chen & Yi An & Zixun Nie & Yuanying Chi & Xinyue Jia, 2025. "Impact of Green Financial Reform on Urban Economic Resilience—A Quasi-Natural Experiment Based on Green Financial Reform and Innovation Pilot Zones," Sustainability, MDPI, vol. 17(15), pages 1-32, July.
    4. Birau Ramona & Popescu Virgil, 2025. "A Literature Survey On Climate Finance, Green Finance And Energy Finance Considering The Impact On Economic Growth And Sustainable Development," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 206-211, February.
    5. Canfei He & Wenbo Hu & Dejie He, 2026. "How venture capital promotes urban industrial green transition: the moderating role of cross-green linkages," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 75(2), pages 1-22, June.

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