The Dampening Effect of Green Finance Reform Policies on Corporate Green Innovation Bubbles: An Empirical Study of Chinese A-Share Listed Companies
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Keywords
green finance reform, green innovation bubble, strategic innovation, substantive innovation
Abstract
While green finance reform policies channel capital toward green industries, can they effectively curb the green innovation bubbles caused by corporate “greenwashing”? This study examines Chinese A-share listed companies from 2010 to 2024, treating the establishment of green finance reform and innovation pilot zones as a quasi-natural experiment. Using a multi-period difference-in-differences method, the study systematically investigates the impact of green finance policies on corporate green innovation bubbles and their transmission mechanisms. The findings reveal: First, green finance reform policies significantly curb corporate green innovation bubbles. Second, a decomposition of the transmission mechanisms indicates that strategic green innovation is the core channel through which policies exert their “corrective” function; due to the short-term crowding-out effect of policies on substantive innovation, the contribution of the substantive green innovation channel is weak and runs in the opposite direction. Third, the policy effects exhibit heterogeneity: non-state-owned enterprises are more sensitive to policy responses; the moderating role of executives’ financial backgrounds is limited, with differences between groups failing to reach statistical significance. This paper reveals the underlying mechanism by which green finance policies improve innovation quality by curbing strategic innovation, providing empirical evidence for mitigating “greenwashing” risks and optimizing the institutional design of green finance.
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