The effects of green finance on enterprises’ green innovation under the "dual carbon" goal: an exploratory study based on fsQCA

Abstract

Abstract The increasingly severe environmental pollution problem has forced decision-makers to incorporate green innovation into the agenda of high-quality economic development. The topic of green finance has caught the attention of policy makers and industries. However, the impact of green finance on corporate green innovation is still unexplored. We use China’s data from 31 provinces (333 cities) in 2021 to examine the link between corporate green innovation and green finance. This paper analyzes the mixed effect of green finance on green innovation of enterprises by using the qualitative comparative analysis method of fuzzy set. The factors include green credit, green bond, green investment, green insurance and green subsidy. Our results manifest that green innovation in businesses is not a product of a single antecedent situation, but rather the interaction of several antecedent conditions. Green insurance and green subsidy are the core prerequisites for high green innovation in enterprises, and green credit plays an auxiliary role. When there is a lack of green insurance, green bond and green subsidy play a key role, leading to a high level in green innovation of businesses. In addition, the impact of various antecedents on the level of green innovation performance in enterprises is asymmetric. Policy makers should attach importance to providing financial support to firms and minimize the risks of green innovation by expanding financing channels. Our findings enrich the literature on green innovation and finance, and provide beneficial practical insights for green innovation in enterprises.