| China’s economy has transitioned from the high-speed growth stage to the one of highquality development over the past few years.However,several bottlenecks associated with the traditional factor-driven development mode have become increasingly problematic,such as tighter constraints on resources and the environment and insufficient endogenous growth drivers.Stylized facts from the real data reveal that,on the one hand,Chinese economic growth is experiencing severe downward pressure as a result of declining demographic dividends and diminishing capital returns,and that the economic development mode urgently needs to shift from the previous "factor-driven" mode to the "innovation-driven" one.On the other hand,past long-term extensive economic growth and political promotion tournament have led to a series of severe ecological and environmental problems in China,especially the strategic goals of"2030 carbon peak" and "2060 carbon neutrality" make it more urgent for China to address environmental degradation and climate change.It is therefore imperative that the economic development mode also needs to transform from the prior "brown and gray development" mode to the "green development" one.Against this dual pressure background,China has been adhering to a new development concept centered on "green innovation" since the 18th,19th,and 20th National Congresses of the Communist Party of China.It is not only a reaction to international competition in China-US trade and technological competition in recent years,but also an inherent requirement to transform economic development modes.As the core of the modern economy and the blood of the real economy,finance is often endogenous in the transition process of economic development stages.Consequently,it is inevitable that a huge demand for green finance will follow the urgent need of the real economy to achieve green innovation development.To end this,this paper aims to conduct systematic research on the institutional change process of green finance,as well as the theoretical mechanisms,macromicroeconomic effects,and intermediate channels of green finance’s impact on green innovation.The research content and research conclusions are as follows.Firstly,this paper systematically analyzes the evolution of green finance development at home and abroad from the perspective of institutional change,and then dissects the key bottlenecks for green finance to support green innovation in China.From the perspective of the international background,green finance developed earlier and is more mature in Western European and American countries.Relevant thoughts and concepts can be traced back to the"Love River" incident and the subsequent "Super Fund" bill in the United States,which prompted banks-financial institutions to pay close attention to and prevent environmental pollution-related credit risks.Afterwards,many countries have launched a number of green investment and financing business explorations in green credit,green bonds,and environmental rights transactions following the release of financial industry standards and environmental initiatives such as the "Equator Principles" and the "Paris Agreement." Taking the background of China,based on the variation in endogenous financial demand at different stages of economic development,this paper divides the institutional change process for green finance development in China into three stages of preliminary exploration(1995-201 1),rapid growth(2012-2020),and gradual deepening(from 2021 to now).In the stage of preliminary exploration stage,although China has introduced relevant green credit policies and measures to deal with the increasing severe environmental and resource challenges,the system design is more limiting to promoting and introducing ideas and concepts,and the actual pre-loan review and post-loan tracking process have not been effectively implemented.In the stage of rapid growth,the development of China’s green finance has entered the fast lane in an all-round way.Not only has it developed a multi-level green financial product and market system,including green bonds,green credits,and environmental rights transactions,but it has also developed a unique institutional framework for green finance that combines top-down central design and bottomup local experimentation.In the stage of gradual deepening,on the one hand,China’s green finance closely centers on the strategic direction of "carbon reduction" and deepens its development,so as to continually improve the green financial system that supports the realization of the "30·60" dual-carbon goals;on the other hand,China’s green finance continuously deepens its international cooperation,contributing more and more Chinese wisdom and solutions to global guidelines,standards,and frameworks for emission reductions.Finally,this paper dissects the key bottlenecks of China’s green finance in terms of insufficient market scale,unbalanced product combination,imperfect standard system,and unsound incentive and restraint mechanism in supporting green innovation in the real economy based on typical facts in the specific policy practice process.Secondly,from the theoretical modeling perspective,this paper develops a multi-sector endogenous growth model involving the final product sector,intermediate product sector,research and development(R&D)sector,household sector,and financial sector to intuitively clarify the mathematical relationship between green finance and green innovation development of the real economy.Among these sectors,the intermediate product sector meets the conditions of monopolistic competition,and mainly processes intermediate products for the final product sector using capital leased by financial sector and new knowledge and technologies created by research and development sector.Meanwhile,in line with the classical Romer’s(1990)endogenous growth model,the development of new knowledge and the invention of new technologies are primarily accomplished by employing high-level human capital in the R&D department.However,different from the single sector setting in Romer’s(1990)study,the final product sector in the study consists of clean and polluting sectors,and the total technological progress rate consists of green and brown technology progress rates of linear weight,and human capital working in the R&D department also consists of green and brown human capital engaged in green and brown technological innovation.Additionally,to capture the incentive and restraint effects of green finance on clean and polluting production,we split the leased capital provided by the financial sector to the intermediate product sector into two categories:green capital going to clean production,and brown capital going to polluting production.Specifically,financial intermediaries provide low interest rates on green capital to companies that provide intermediate products for clean production sectors,but they charge high interest rates on brown capital if they provide intermediate products for polluting production sectors.Under the framework of the proposed model,this study puts forward the following two propositions on the balanced growth path through comparative static analysis:the aggregate technological progress rate gA*(or endogenous economic growth rate)will increase with the increase of green financial policy incentives and constraints s.Moreover,the green technological progress gAG*will increase with the increase of s,while the brown technological progress rate gAP*will decrease with the increase of s.Furthermore,by applying parameter calibration and numerical simulation,this study further intuitively presents the incentive and constraint effects of green finance and the dynamic impact of the human capital structure of the R&D department on the green(brown)technological progress rate and endogenous economic growth rate.Thirdly,the regional economy organically constitutes the overall picture of the entire national economy.Currently,China’s economy is moving towards a stage of high-quality development with "green innovation" as the core concept and building a green innovation highland with regional influence has been given a greater degree of responsibility and mission.Accordingly,this paper examines the causal impact and economic channels of green finance on regional green innovation and development from a macro-regional perspective.In terms of indicator measurement,in order to measure the development level of green innovation in a region from the perspective of productivity considering environmental resource constraints,this study combines the ray SBM model proposed by Song et al.(2018)with the biennial production possibility set proposed by Pastor et al.(2011),to construct the RSBM-BML productivity index that can more accurately measure green total factor productivity.Moreover,this study constructs a quasi-natural experiment using the several green finance reform and innovation pilot areas built in 2017 in order to overcome the endogenous bias among variables and capture the causal effect of green finance on regional green innovation development.It is worth noting here that the original sample covers a panel data of 282 prefecture-level and above cities from 2014 to 2020.Considering the smaller number of sample cities in the treatment group(8)than the original control group(274),the synthetic control method with greater adaptability was selected for the modeling analysis.The baseline estimation results show that the green finance pilot policies in Huzhou City and Quzhou City in Zhejiang Province,Guiyang City in Guizhou Province,Guangzhou City in Guangdong Province and Karamay City in Xinjiang all exert a significant promotion effect on green total factor productivity.In contrast,the green finance pilot policies in Nanchang City and Jiujiang City in Jiangxi Province have not effectively facilitated the local green innovation development during the sample period.Likewise,robustness tests carried out in this paper using placebo sorting method,iterative leave-one-out method,and synthetic difference-in-difference estimation again confirm the baseline estimation results.Furthermore,the mechanism analysis shows that for most cities with significant pilot policies,green finance mainly improves greenness through strengthening front-end production and end-end governance,such as intensifying energy use and reducing pollutant emissions.However,only a very small number of cities have outstanding performance in mid-end green technological advancement.Finally,enterprises,as the core of the entire macro economy,actively engage in green innovation activities not only to comply with the national innovation-driven and green transformation development strategy,but also to improve their core competitiveness and facilitate sustainable growth.As such,this paper conducts an empirical study using the 20132021 Chinese A-share listed companies as the research object and examines whether and how green finance influences the quality of corporate green innovation.Noted that since enterprises with strong green innovation capabilities are more likely to receive green capital support from financial intermediaries or financial markets,reverse causality will inherently interfere with studies of the relationship between green finance and green innovation.Meanwhile,there are likely to be common factors affecting both green finance and green innovation at the same time,resulting in omitted variables bias.In order to minimize the endogenous bias mentioned above,this study also uses the green finance pilot policy as an exogenous impact in constructing a quasi-natural experiment and employs the difference-in-difference approach to identify the causal relationship between green finance and green innovation.Benchmark regression results show that green finance has significantly triggered the quality of corporate green innovation,and the research conclusion remains stable after removing the cut-off bias,small sample selection bias,and other policy interference as well as passing the parallel trend test and the mixed placebo test.Moreover,this paper theoretically conjectures and empirical examines three plausible economic mechanisms through which green finance could improves the quality of corporate green innovation:reducing transaction costs,alleviating financing constraints,and enhancing peer-to-peer R&D competition.Additionally,the heterogeneity effect analysis in this paper suggests that the beneficial effect of green finance on the quality of corporate green innovation is more pronounced in sub-samples of green patents of front-end energy-sanving technologies,high-polluting industries,non-state-owned enterprises,and small,medium and micro enterprises.Furthermore,the economic and environmental implications of the green finance pilot policy show that the enhanced quality of green innovation could in turn improve the total factor productivity,market competitiveness and environmental responsibility of enterprises.This paper makes potential innovations compared to the existing related research in threefold.Firstly,in terms of research perspective,this paper is oriented towards the need for major practical issues,and it investigates the financial driving mechanism that affects green innovation in the real economy from the perspective of green finance.To cope with increasingly severe environmental and resource constraints and enhance the endogenous driving force of economic growth,the development of the real economy urgently needs to realize "green transformation" and "innovation-driven".It is against this strategic backdrop that more and more studies attempt to analyze the factors that influence green innovation development from the perspectives of economic development stage,industrial structure adjustment,government fiscal expenditure,foreign direct investment,digital economy development,and public infrastructure construction.Despite critical policy significance,there is a paucity of research on the role of green finance in green innovation development.This study argues that finance is the heart of the modern economy and the lifeblood of the real economy.To achieve the strategic goals of "2030 carbon peak" and "2060 carbon neutrality",China will need a huge number of investments and financing in the green sector,and the green finance therefore has great potential but also faces unprecedented challenges.Based on this practical problem orientation and from the unique perspective of green finance,this study conducts systematic research into the financial driving mechanisms that affect green innovation development of the real economy,thus effectively making up for the gaps in existing literature.Secondly,in terms of research content,this paper uses a combination of theoretical modeling and empirical analysis,macro and micro,to investigate the causal effect and economic mechanism of green finance’s impact on green innovation.Most current academic analyses focus on descriptive and normative analysis of whether and how green finance affects green innovation development of the real economy,with few systematic studies clarifying their internal logics.Hence,a key innovation in this study is to investigate the causal effects and intermediate mechanisms of green finance on green innovation in the real economy through rigorous theoretical modeling and scientific empirical analysis.Specifically,the theoretical analysis in Chapter 4 develops a multi-sector endogenous growth model that includes final production sector,intermediate production sector,R&D sector,household sector,and financial intermediary sector,along with rigorous mathematical analysis of the relationship between green finance,green technology progress and endogenous economic growth.Meanwhile,the empirical analysis in Chapters 5 and 6 constructs an exogenous quasi-natural experiment of green finance,and applies a variety of advanced econometric methods to examine and identify whether and how green finance affects regional green innovation development and corporate green innovation growth from both macro and micro perspectives.Thirdly,in terms of research design,this paper uses rigorous mathematical deduction to demonstrate the logical connection between green finance and green innovation,as well as a variety of causal econometrics and mathematical statistics methods to identify their real relationship.As a result of flawed research design,such as methods application,models specification,and indicators selection,the existing literature has failed to clarify the theoretical mechanism behind the impact of green finance on the green innovation development of the real economy.Specifically,its associated empirical system has several key deficiencies in overgeneralizing conceptual connotations,failing to avoid endogenous biases,and being interfered with by other policies,resulting in many different research conclusions drawn by different scholars,and even being completely contradictory.Another innovation in this study is the use of rigorous economic analyzes and advanced research methods to provide a credible basis for understanding the actual linkage between green finance and green innovation.Specifically,the theoretical modeling part of Chapter 4 presents a rigorous and intuitive demonstration of the dynamic relationship between green finance and green technology progress rate using the mathematical statistics methods of comparative static analysis,parameter calibration,and numerical simulation.In the empirical analyzes part of Chapters 5 and 6,this study employs the appropriate causal econometric method for different types of data samples,coupled with multiple robustness methods such as placebo sorting test,iterative leaveone-out test and parallel trend test,to avoid estimation result biases caused by reverse causality,omitted variables and other possible explanations. |
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