How green finance affects automobile innovation?: The perspective of lasso-based multi-mediation effect

Abstract

The world has been working towards carbon neutrality since the signing of the Paris Agreement. With the automobile industry accounting greatly in global energy consumption and GHG emissions, this research believes that it is essential and urgent to reduce carbon emissions through innovation. However, the process of transfer comes with the economic loss and the cost of financing. Green finance could soften the cost of the process of transfer. This sheds new light on how green finance influence innovation in automobile industry by applying Lasso machine learning methods to choose variables. Based on global data from 2018-2020, results of this empirical research show that: there are significant contributions of green finance to automobile innovation, in particular, the marginal benefits are greater in countries on the coast than in the lock-landed countries, carbon neutrality can be looked as the benchmark of the anchoring effect to ?nudge? the process of green finance on automobile innovation, and the mechanism behind the effect is the amount of population, human resources, GDP, which provides further enhancement on the process of green finance to automobile innovation. Based on the findings, this study suggests that policymakers should scale up investments in green finance to encourage it to have a greater impact on automobile innovation, while using carbon neutrality targets to ?nudge? the effects of green finance, with vital opportunities for lock-landed countries and the value of population, human resources, and GDP taken into consideration.