Financial development and renewable energy technology: The heterogeneous role of energy endowment, market environment and policy support in Chinese provinces

Danqi Wei, Fayyaz Ahmad, Nabila Abid () and Amber Gul
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Danqi Wei: Lanzhou University
Fayyaz Ahmad: Lanzhou University
Nabila Abid: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Amber Gul: Sichuan Agricultural University

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Abstract: The advancement of renewable energy an essential stage toward achieving a low-carbon energy transition, with finance sector playing a significant role in this process. This study analyzes the impact of financial development on renewable energy technology innovation across 30 Chinese provinces from 2007 to 2019, focusing on key financial dimensions such as banks, bonds, stocks, and foreign direct investment. The research indicates that financial development significantly enhances innovation in renewable energy technology. Further heterogeneity analysis indicates that the inherent advantage of renewable energy resources impedes the pace of substitution for renewable energy technology innovation, while more market-oriented regions can more easily occupy the high value-added renewable energy technology innovation. The development pace of renewable energy technology innovation varies across regions, influenced by distinct renewable energy strategies. Foreign direct investment has produced contrary effects. The moderation test indicates that both investment-based and cost-based environmental regulations enhance the positive effect of financial capital on renewable energy technology innovation. The results establish a theoretical foundation for advancing renewable energy technology innovation and offer practical insights for facilitating the low-carbon transition in developing economies.

Keywords: China; Environmental regulation; Renewable energy technology innovation; Financial development; Low carbon energy transition (search for similar items in EconPapers)
Date: 2025-03-21
New Economics Papers: this item is included in nep-cna, nep-ene, nep-env, nep-fdg and nep-ppm
Note: View the original document on HAL open archive server: https://hal.science/hal-05568595v1
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Published in Energy Strategy Reviews, 2025, 59, pp.101697. ⟨10.1016/j.esr.2025.101697⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05568595

DOI: 10.1016/j.esr.2025.101697

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