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Does Bank Competition Promote Corporate Green Innovation? Evidence from the Location of Bank Branches

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  • Yufeng Xia
  • Peisen Liu

Abstract

Based on the geographic coordinates of bank branches and firms, this study analyzes the impact of firm‐level bank competition on corporate green innovation and its underlying mechanisms. The findings of this study are mainly as follows. First, bank competition promotes corporate green innovation by reducing transaction costs, increasing the possibility and quantity of firms applying for green patents. Second, bank competition increases the share of green innovation while reducing the share of nongreen innovation. Third, environmental regulation strengthens the promotion effect of bank competition on corporate green innovation, and the strengthening effect is greatest when environmental regulation is between its 50th and 75th quantile. The proportion of state‐owned banks weakens the promotion effect of bank competition on corporate green innovation. This paper is helpful to understand the impact of the banking system on sustainable economic development.

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  • Yufeng Xia & Peisen Liu, 2022. "Does Bank Competition Promote Corporate Green Innovation? Evidence from the Location of Bank Branches," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(2), pages 84-116, March.
    • Handle: RePEc:bla:chinae:v:30:y:2022:i:2:p:84-116
    DOI: 10.1111/cwe.12411
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    2. Tao Qian & Yutao Zhan & Shiyuan Pan, 2023. "Can the Super‐deduction of R&D Expenses Boost R&D Investment?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(5), pages 135-160, September.
    3. Xiang, Yitian & Cui, Haotian & Bi, Yunxiao, 2023. "The impact and channel effects of banking competition and government intervention on carbon emissions: Evidence from China," Energy Policy, Elsevier, vol. 175(C).
    4. agarwal, shekhar & Gordon, Anna, 2022. "Complexities for the Indian Economy of China's Growing Technological Competence," OSF Preprints fk3r7, Center for Open Science.
    5. Qi Hu & Fang Wu & Yingna Qu & Ke Guo & Xinyi Du, 2022. "Green Innovation’s Promoting Impact on the Fusion of Industry and Talent: The Case of Pharmaceutical Industry in the Yangtze River Economic Belt of China," Sustainability, MDPI, vol. 14(12), pages 1-20, June.

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