The mechanism of green finance's impact on enterprises' sustainable green innovation

Global attention toward environmental sustainability and economic green transformation is on the rise. Green technology innovation plays a crucial role in achieving green economic development, making the study of enterprises' sustainable green innovation highly valuable. This paper aims to examine the influence mechanism of green finance on enterprises' sustainable green innovation. To achieve this, panel data from A-share-listed enterprises in Shanghai and Shenzhen between 2012 and 2020 are utilized as the basis for analysis. The results show that: (1) Green finance plays an important role in encouraging enterprises' sustainable green innovation. (2) The test of the intermediary effect reveals that green finance can stimulate enterprises' sustainable green innovation by increasing continued R&D investment. (3) The moderating mechanism test reveals that enterprise financing restrictions and enterprise debt default risk moderate the influence of green finance on enterprises' sustainable green innovation. Furthermore, for enterprises with high financial constraints and a high risk of debt default, the development of green finance is particularly important in fostering their longterm green innovation. (4) The study concludes that all four types of sustainable green innovation, namely, strategic, substantive, independent and cooperative, exhibit the promotion effect of green financial development, the intermediary effect of continuous R&D investment and the moderating effect of financing constraints. Enterprises with a higher risk of defaulting on their debt are more likely to make significant, independent and sustainable green innovations.