Green Financial Policy for Fostering Green Technological Innovation: The Role of Financing Constraints, Science Expenditure, and Heightened Industrial Structure

Ying Fu (), Zhaohan Wang () and Yun Wang
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Ying Fu: School of Economics and Business Administration, Chongqing University of Education, Chongqing 400065, China
Zhaohan Wang: School of New Media Electronic Business, Chongqing Institute of Engineering, Chongqing 400056, China
Yun Wang: China School of Banking and Finance, University of International Business and Economics, Beijing 100029, China

Sustainability, 2024, vol. 16, issue 20, 1-26

Abstract: The environment has become an increasing concern due to the accelerated expansion of the world’s economy. Green finance is a crucial strategy for China to address challenges in fostering green innovation and achieving sustainable development. By employing the difference-in-differences (DID) method, this study assessed the influence of green financial policy (GFP) on green technological innovation (GTI) in the Yangtze River Economic Belt (YREB). The results indicate that GFP significantly improves GTI, especially in cities with a lower level of green finance development, cities with a medium level of GTI, and cities upstream of the Yangtze River. A mechanism analysis found that GFP promotes GTI in the YREB by alleviating financing constraints and increasing science expenditures. However, it fails to improve GTI through the heightened industrial structure. The findings provide empirical proof and policy direction for the reformation of green financing and the achievement of ecological transformation in the river basin economy in accordance with the ‘dual-carbon’ goal.

Keywords: difference-in-differences (DID); sustainable development; green technology innovation; green finance reform innovation pilot zones (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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