The Nonlinear Impact of Green Finance on Green Innovation: Insights from China

Xinyu Li

doi:10.54254/2754-1169/2025.22762

Research Article

Open access

Published on 15 May 2025

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Li,X. (2025). The Nonlinear Impact of Green Finance on Green Innovation: Insights from China. Advances in Economics, Management and Political Sciences,180,61-68.

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The Nonlinear Impact of Green Finance on Green Innovation: Insights from China

Xinyu Li *^,1,

¹ The USC Dornsife College of Letters, Arts and Sciences, University of Southern California, Los Angeles, USA

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/2025.22762

Abstract

Green finance is vital for fostering regional green innovation in China to promote high-quality economic development. An extensive index system is employed in this study to examine the correlation between green financial growth and regional green technology progress. Findings indicate a positive influence of green finance on green technological advancement, characterized by a diminishing effect as green financial development progresses in an "inverted U-shaped" pattern. Since 2017, the implementation of green financial reform pilot zones has led to a convergence in green financial development levels among provinces, approaching a critical threshold that signifies a shift in its influence on regional innovation. Regional disparities are evident, with the central region benefiting the most from green financial development, the eastern region experiencing weaker effects, and the western region facing limitations due to underdeveloped financial infrastructure. Recommendations for policymakers comprise deploying dynamic monitoring systems to enhance the efficacy of green financial policies, managing financialization risks via strengthened ESG frameworks, and implementing customized regional strategies to maximize the synergy between green finance and technological progress. These results provide crucial guidance for policymakers to utilize green finance as a catalyst for sustainable development and technological innovation.

Keywords

Green finance, green innovation, regional development, sustainable development

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Cite this article

Li,X. (2025). The Nonlinear Impact of Green Finance on Green Innovation: Insights from China. Advances in Economics, Management and Political Sciences,180,61-68.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 3rd International Conference on Management Research and Economic Development

Conference website: https://2025.icmred.org/

ISBN：978-1-80590-081-8(Print) / 978-1-80590-082-5(Online)

Conference date: 30 May 2025

Editor：Canh Thien Dang

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.180

ISSN：2754-1169(Print) / 2754-1177(Online)

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