How broadband infrastructure development impacts green innovation? A corporate financialization mediated perspective

Digital technologies constitute a critical enabler for attaining a net zero target. However, how digital infrastructure, the material infrastructure that underpins digital technologies, shapes firms' green innovation remains uncertain. The uniqueness of this analysis lies in evaluating the causal implications of the Broadband China policy on corporate green innovation using a staggered difference-in-differences technique. Our study indicates that the Broadband China policy robustly boosts corporate green innovation. However, treatment impacts vary across calendar times, entry cohorts, and exposure durations, with most estimates exhibiting powerful and positive effects. Further analysis indicates that the Broadband China policy boosts green innovation indirectly through financialization by increasing corporate operating income and total asset turnover while minimizing management operating costs. The findings endorse that the corporate green innovation process requires more long-term, stable, and continuous financial support due to its high information asymmetry, high-risk nature, and long-term investment cycle.