Impact of fintech and environmental regulation on green innovation: inspiration from prefecture-level cities in China

Environmental regulations may promote regional ecological evolution, but they also increase the need for financing green innovation activities. This study uses panel data from prefecture-level cities in China to examine the impact of fintech and environmental regulation on regional green innovation in the digital economy era. Empirical evidence shows that fintech significantly promotes regional green innovation, and fintech has a positive interaction effect with environmental regulation. While the evidence generally supports the role of environmental regulations in promoting green innovation, the evidence is insignificant in some models. The synergistic effect of fintech and environmental regulation on utility model green innovation is significant, but not on invention type green innovation. Climate policy, as a carbon regulatory policy, does not directly lead to green innovation, but it significantly collaborates with fintech to promote green innovation. The effects of fintech and environmental regulation on green innovation also have heterogeneity effects between resource-based and non-resource-based cities, and non-resource-based cities have a greater effect on achieving green innovation through fintech and environmental regulation. Our findings contribute to optimizing the coordination system between financial and environmental policies, thereby driving regional green innovation development with fintech in the digital age.