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Can the green finance reform and innovation pilot policy promote green technology innovation?—a novelty evidence from both polluting companies and city commercial banks in China

Author

Listed:
  • Yongkang Lin

    (Shandong University of Finance and Economics)

  • Qinghua Song

    (Zhongnan University of Economics and Law)

  • Lingyun He

    (China University of Mining and Technology)

Abstract

Based on data on polluting enterprises and city commercial banks in China from 2012 to 2020, this study examines the influence of this pilot policy on the green technology innovation of these polluting enterprises. The study found that: (1) The pilot policy incentivized green technology innovation and led to enhanced innovation both in terms of quality and quantity. Notably, the enhancement in innovation quality was primarily observed within state-owned enterprises. (2) This “reverse forcing” effect is mainly reflected in external pressure of financing constraints and internal incentives such as manager incentives and enterprise productivity. Capital element redistribution mechanism of city commercial banks plays an important role, and the effect of public pressure is less obvious. (3) Implementing this pilot policy for green technology innovation enhances the local technical level and environmental conditions. The results of this research not only underscore the significance of green finance in economic transformation, but also provides experience support for China to better use its pilot zones to drive green development across the country.

Suggested Citation

  • Yongkang Lin & Qinghua Song & Lingyun He, 2025. "Can the green finance reform and innovation pilot policy promote green technology innovation?—a novelty evidence from both polluting companies and city commercial banks in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(4), pages 8403-8431, April.
    • Handle: RePEc:spr:endesu:v:27:y:2025:i:4:d:10.1007_s10668-023-04239-0
    DOI: 10.1007/s10668-023-04239-0
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