Fiscal reform and green innovation: Evidence from China's local debt management reform

Tian Li and Feng Qi

Finance Research Letters, 2025, vol. 76, issue C

Abstract: This quasi-natural experimental study examines how China's local government debt management reform affects corporate green innovation. The findings show that the reform significantly promotes green innovation by reducing financial constraints and efficient resource allocation. Mechanism analysis reveals that while higher default risk strengthens the effects of the reform, firms with higher total factor productivity (TFP) benefit more from resource optimization and policy incentives. Heterogeneity analysis shows stronger impacts in regions with less developed markets and firms with high capital density. These findings are confirmed through robustness tests. This study underscores the importance of macroeconomic policies in driving sustainable development and corporate innovation.

Keywords: Local debt management reform; Green innovation; Quasi-natural experiment; Policy impact; Sustainability (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612325002016
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002016

DOI: 10.1016/j.frl.2025.106937

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().