Green Finance Empowering Corporate Green Innovation Based on the Dual Mechanisms of Resource Allocation and Market Signaling

This study empirically examines the impact of green finance on corporate green innovation, its regional heterogeneity, and underlying mechanisms using a sample of A-share listed companies in Shanghai and Shenzhen stock exchanges from 2010 to 2023. The findings reveal three key insights: First, green finance significantly promotes corporate green innovation, a conclusion that remains robust in both one-period lag tests and alternative sample interval robustness checks. Second, the effect exhibits distinct regional heterogeneity - the western region demonstrates the strongest and most significant positive impact, while the eastern region shows a positive but statistically insignificant effect, and the central region displays no significant impact. Third, the study identifies two primary mechanisms through which green finance influences green innovation: alleviating financing constraints by providing specialized financing instruments, policy endorsements, and synergistic effects that enhance capital accessibility for green innovation projects; and transmitting market signals through improved information disclosure, third-party evaluations, and increased market attention that channels resources toward green innovation initiatives. These findings provide micro-level evidence for understanding the green finance-innovation nexus and offer theoretical foundations for optimizing green finance policy design.