Industry-finance cooperation and firm green innovation: a quasi-natural experiment from China

Purpose Based on a quasi-natural experiment of China’s industry-finance cooperation pilot cities, we examine the impact of such cooperation on firm green innovation. Design/methodology/approach The study uses the sample of A-share listed firms on the Shanghai and Shenzhen stock exchanges from 2012 to 2022 to test the impact of industry-finance cooperation pilots on firm green innovation through a multi-period DID model. Findings The findings show that the pilot policy significantly enhances green innovation levels in firms, with more pronounced effects in non-politically connected firms, polluting industries, and regions with greater environmental regulatory pressure. The innovation resource and the environmental willingness are key influencing mechanisms. Finally, green innovation driven by the policy not only increases firm economic benefits but also enhances social benefits. Practical implications The research demonstrates the pivotal role of industry-finance cooperation in effectively promoting firm green innovation, highlighting the potential of environmental protection achieved through such cooperation, which holds important practical significance for addressing sustainability challenges. Social implications Firms should strengthen their cooperation with financial institutions and improve the sustainability and stability of financing through information exchange and sharing mechanisms. Financial institutions also need to prioritize the review of firms’ environmental conditions during the lending process, thereby prompting them to reassess their environmental protection strategies. Originality/value This paper mainly focuses on the theoretical framework of industry-finance cooperation. By analyzing the impact and mechanism of the pilot policy on firm green innovation, this study provides valuable theoretical insights. These insights are crucial for enhancing financial services for the real economy, offering a more comprehensive understanding of how industry-finance cooperation can drive sustainable development and support firms in their environmental efforts.