How good is green finance for green innovation? Evidence from the Chinese high-carbon sector

In this study, we examine the impact of green finance on green innovation in the Chinese high-carbon sector. Utilizing the panel dataset of listed companies in Shenzhen and Shanghai A-shares from 2011 to 2019, we adopt coupled coordination and multiple regression models, along with a battery of robustness tests. Our findings show that: (1) Green finance significantly promotes green innovation in the high-carbon sector, verifying its “resource compensation” effect. (2) The stimulating effect of green finance for green innovation is stronger in state-owned enterprises (SOEs) and firms with higher social responsibility (CSR) scores. (3) Green innovation brings significant positive economic effects, mainly from green invention patents (substantial innovation) rather than green utility patents (marginal innovation). In the case of the high-carbon sector, our findings can guide macro policymakers and investors regarding policy effects and micro-innovation behaviors of heterogeneous firms.