A nexus between green digital finance and green innovation under asymmetric effects on renewable energy markets: a study on Chinese green cities

This article examines the innovation in the green sector frequently facing a financial conundrum. Production of renewable energy is the eighth sustainable development, based on the data from the 30 Chinese provinces (2000–2017). This study presents an analysis of the effects of green digital finance on green innovation on protection of environment using influence mechanism analysis. Digital finance, which has become a major driver of green innovations in China, may first increase the number and quality of green technical innovation. The results show that the promotion effect of digital finance on the efficiency of renewable energy markets is greater than the inhibitory effect, making the total effect less obviously favorable. In other results, the elasticity of lnGFDI is significant at the 5% level and is 0.1545% and 0.1880% in the present and 1-year delayed periods, respectively. Further, the average total effect of FDI on the effectiveness of green innovation is 0.008, with an average encouraging effect of 0.0051 and an average inhibiting effect of 0.0039. We conclude that diverse behavior for that policy support increases the impact of green digital finance, promote green innovation, and generate emission free environment for sustainable energy markets.