Green finance reform and corporate innovation: Evidence from China

This study explores how a place-based green finance policy in China, pilot zones for green finance reform and innovations, affects corporate innovation. Our difference-in-differences (DID) estimation documents that the green finance reform causally enhances corporate innovation. We contend that the decreased debt cost, and the increased innovation input and foreign investment are the potential mechanisms at work. The promoting effect is more pronounced for local SOEs and firms with lower network attention. Our study provides evidence for the positive consequences of the green finance reform.