How does green credit effectively promote green technology innovation?

Bin Xu and Boqiang Lin ()

International Review of Financial Analysis, 2025, vol. 102, issue C

Abstract: Green technology innovation serves as the fundamental driving force behind the growth of renewable energy and plays a crucial role in mitigating climate change. Currently, green credit can provide essential financial resources for technological advancements. In contrast to existing literature, this article employs a semi-parametric model to explore the nonlinear effects and mechanisms through which green credit influences green technology innovation. The main empirical results include the following points. The impact of green credit on green technology innovation exhibits a non-linear relationship, characterized by a positive U-shaped pattern. This suggests that the technological effects of green credit have evolved from being negligible in the initial stages to becoming significant in the later stages. Heterogeneity analysis displays that green credit produces an N-shaped impact on green technology innovation in the eastern and central regions, but generates a positive U-shaped nonlinear effect in the western region. In addition, green credit produces an inverted N-shaped impact in the low- and medium-tech provinces, but has a positive U-shaped impact in the medium-tech provinces. Mechanism analysis indicates that banking market structure generates a positive U-shaped impact on green technology innovation, while enterprises' R&D investment yields an inverted U-shaped impact. In addition, this article also provides the impact of resource endowment, informatization, fiscal decentralization, industrial structure, and foreign direct investment on green technology innovation.

Keywords: Green credit; Banking market structure; Enterprises' R&D investment; Green technology innovation; Semiparametric model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:102:y:2025:i:c:s1057521925001760

DOI: 10.1016/j.irfa.2025.104089

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