Green Finance and Corporate Green Innovation: Based on China's Green Finance Reform and Innovation Pilot Policy

Using data on China's A-share listed enterprises from 2012 to 2019, we investigate the impact of China's green finance reform and innovation pilot (GFRIP) policy on green innovation by the difference-in-difference (DID) method. The results show that the GFRIP policy has a significant role in promoting enterprises' green innovation. Heterogeneity analysis shows that the positive effect of the GFRIP policy on green innovation is only significant for heavily polluting enterprises, large enterprises, state-owned enterprises, and enterprises headquartered in regions with a low level of marketization. Debt financing is an important mechanism for the GFRIP policy to promote corporate green innovation; that is, the GFRIP policy alleviates corporate debt financing constraints and then promotes corporate green innovation. Our study provides theoretical and practical enlightenment for developing countries such as China to deepen reform of the green financial system and promote green innovation.