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

Huacheng Rao, Dongxu Chen (), Feichao Shen and Yangyang Shen
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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
Feichao Shen: Business School, Hohai University, Nanjing 211100, China
Yangyang Shen: School of Economics and Management, Guangdong Technology College, Zhaoqing 526100, China

Sustainability, 2022, vol. 14, issue 23, 1-19

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.

Keywords: green bond; green innovation; financial constraints; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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