Does green finance reform promote corporate green innovation?: Evidence from China

In this study, the policy of green finance reform and an innovation pilot site in 2017 was used as a quasi-natural experiment to investigate the influences of green finance reform on corporate green innovation. It was found that corporate green innovation improved significantly after the implementation of green finance reform. According to the mechanism test, green finance reform promoted corporate green innovation by relieving financing constraints, optimizing credit resource allocation, and guiding the fiscal subsidies of the government. It was found in the analysis of heterogeneity that the promoting effect of green finance reform on corporate green innovation concentrated on green enterprises, non-state-owned enterprises, and enterprises in regions with high financial development levels. Furthermore, the PZGFRI could improve market value of enterprises.This study provides clues to disclose the action and mechanism of green finance reform on corporate green innovation and lays a policy foundation for China's green financial development. •Corporate green innovation level was improved after the implementation of PZGFRI.•Green finance promoted corporate green innovation by relieving financing.•Green finance promoted corporate green innovation by restricting credit resource allocation.•Green finance promoted corporate green innovation by guiding fiscal subsidies.•The impact of green finance on corporate green innovation is heterogeneous.