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How does green finance promote renewable energy technology innovation? A quasi-natural experiment perspective

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  • Nepal, Rabindra
  • Liu, Yang
  • Wang, Jianda
  • Dong, Kangyin

Abstract

The importance of green finance policies, particularly in the realm of innovation in renewable energy technologies, should not be overlooked while assessing the advancement of renewable energy development in China. The objective of this study is to investigate the impact of green finance reform initiatives on the promotion of renewable energy technology innovation (RETI) within cities of China. To accomplish this objective, this study employs the 2017 Green Finance Reform and Innovation Pilot Zones (GFRIPZ) policy as a quasi-natural experiment. A difference-in-differences (DID) model is employed to construct the study framework. The research findings highlight that the implementation of pilot zones has resulted in a substantial and favorable influence on RETI. Moreover, the observable effectiveness of this phenomenon in fostering RETI is predominantly observed in the eastern region of China, small-scale cities, and locations characterized by stringent environmental restrictions. Additionally, our findings demonstrate that this particular policy has an indirect impact on promoting RETI. This is achieved through the improvement of the allocation of financial resources dedicated to green initiatives. These insights offer valuable guidance for policymakers aiming to promote sustainable energy innovation and green development.

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  • Nepal, Rabindra & Liu, Yang & Wang, Jianda & Dong, Kangyin, 2024. "How does green finance promote renewable energy technology innovation? A quasi-natural experiment perspective," Energy Economics, Elsevier, vol. 134(C).
    • Handle: RePEc:eee:eneeco:v:134:y:2024:i:c:s0140988324002846
    DOI: 10.1016/j.eneco.2024.107576
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    More about this item

    Keywords

    Renewable energy technology innovation; Green finance; DID model; China;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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