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Green Finance, Technological Innovation, and Energy Efficiency Improvements: Evidence from China’s Green Finance Reform Pilot Zone

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  • Yun Zhang
  • Xia Fang
  • Zhenyu Yang
  • Yuchen Sun
  • Qiuyu Wang

Abstract

Improving energy efficiency is an important pathway for the development of green and low-carbon economy. Based on the evidence from China’s green finance reform pilot zone, we apply the data of Chinese prefecture-level cities from 2005 to 2020 to analyze the action mechanism among green finance, technological innovation and energy efficiency. We find that green finance effectively promotes energy efficiency. Moreover, the analysis of action mechanism reveals that while green finance can drive green technology innovation, only high-quality green technology innovation (green invention patents) can significantly increase energy efficiency. The heterogeneity analysis reveals that green finance has a more significant effect on increasing energy efficiency in regions with large-scale economic development and weak environmental regulation. Furthermore, digital technology can amplify the driving effect of green finance on energy efficiency, and the higher the level of digital technology development, the greater the driving effect of green finance. The findings provide empirical evidence and policy implications for building a market-based green financial system and promoting green and efficient development in regions.

Suggested Citation

  • Yun Zhang & Xia Fang & Zhenyu Yang & Yuchen Sun & Qiuyu Wang, 2023. "Green Finance, Technological Innovation, and Energy Efficiency Improvements: Evidence from China’s Green Finance Reform Pilot Zone," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(11), pages 3531-3549, September.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:11:p:3531-3549
    DOI: 10.1080/1540496X.2023.2226324
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    Cited by:

    1. Nepal, Rabindra & Zhao, Xiaomeng & Liu, Yang & Dong, Kangyin, 2024. "Can green finance strengthen energy resilience? The case of China," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    2. Li, Ziwei & Wang, Xingyu & Wu, Zhuang, 2024. "Can green finance reform and innovation policies promote corporate carbon performance?," Finance Research Letters, Elsevier, vol. 62(PB).
    3. Zhang, Dongyang & Wang, Cao & Miao, Shan & Deng, Lei, 2024. "The impact of firm's ESG performance on the skill premium: Evidence from China's green finance reform pilot zone," International Review of Financial Analysis, Elsevier, vol. 93(C).

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