Influence mechanism between green finance and green innovation: Exploring regional policy intervention effects in China

The effective use of inclusive green finance is imperative for deriving green innovation, fostering sustainable economic transformation, and addressing climate change. Therefore, this study empirically tests the influence mechanism and policy intervention effects of inclusive green finance on green innovation by applying the difference-in-differences, mediation effects, and panel vector autoregression models using China's regional data from 2010 to 2019. The findings indicate that green finance significantly contributes to green innovation, and these effects remain consistent across alternative estimators. The results of policy intervention effects confirm that the Pilot Zones for green financial innovation and reform encourage green innovation and sustainable performance more pronouncedly than other regions. The mediating effects reveal that industrial structure, economic growth, and research and development investment are the core transmission channels through which green finance influences green innovation. These results offer valuable recommendations.