Does green finance promote green transformation of the real economy?

Deepening green finance reform and promoting the green transformation of the real economy are important for sustainable development. We introduce a natural experiment, the 2017 Green Finance Reform and Innovation Pilot Zone in China, to investigate the impact of green finance reform on the green transformation of the real economy. We show that green finance policies can significantly promote the green transformation of the economy, and our results are robust to different models and specifications. The mechanism analysis shows that corporate environmental responsibility and supply chain responsibility play crucial roles in our results. The higher the degree of fulfillment of corporate environmental responsibility and supply chain responsibility, the more obvious the impact of green finance policy. The heterogeneity test shows that green finance can only promote green transformation in areas with non-state-owned enterprises and high environmental regulation intensity.