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Digital finance and corporate green innovation: quantity or quality?

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Abstract

Recently, the rapid development of digital finance in China has exerted a subtle influence on many aspects of social and economic development. However, the research on the impact of digital finance on corporate green innovation is rather lacking. In order to fill this gap, this paper uses the “Peking University Digital Finance Index” to evaluate the micro impact of financial innovation development on environmental governance from the firm level. The results show that digital finance can significantly improve the quantity and quality of corporate green innovation, and this effect still exists after considering endogeneity and a series of robustness tests. The promotion effect of digital finance on the quantity and quality of corporate green innovation is more obvious in state-owned, eastern, and mature enterprises. In addition, we find the mechanism behind the positive relationship between digital finance and corporate green innovation: digital finance makes firms more transparent and funds flow more convenient. Overall, this paper provides a micro explanation of environmental governance for the accelerated popularization of digital finance in emerging markets, which is urgently needed for most emerging economies seeking high-quality development.

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Notes

  1. By the end of 2018, the number of patent applications processed in China had topped the world for eight consecutive years, almost equal to the total number of applications from the second to the 11th place. However, according to the “2018 Global Innovation Index Report” released by the World Intellectual Property Organization (WIPO) and Cornell University in the United States, China ranked only 17th in innovation The gap also reflects the low quality of Innovation in China.

  2. Eastern provinces include Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian,

    Shandong, Guangdong, Guangxi, and Hainan; The central & western provinces include Shanxi, Inner Mongolia, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan, Sichuan, Chongqing, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Ningxia, Qinghai, and Xinjiang.

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Funding

This study was supported by the National Natural Science Foundation of China (71803171); by the Science and Technology Planning Project of Henan Province (192400410063); by the Social Science Planning Project of Henan Province (2017BJJ052).

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Authors and Affiliations

  1. School of Information, Guizhou University of Finance and Economics, Guiyang, 550525, People’s Republic of China

    Shuya Rao

  2. School of Business Administration, Guizhou University of Finance and Economics, Guiyang, 550525, People’s Republic of China

    Ye Pan

  3. Master of Financial Accountability, York University, Toronto, Canada

    Jianing He

  4. Business College, Xinyang Normal University, Xinyang, 464000, People’s Republic of China

    Xuming Shangguan

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  1. Shuya Rao
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  2. Ye Pan
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  3. Jianing He
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  4. Xuming Shangguan
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Contributions

S.R.: conceptualization, data curation, writing original draft. Y.P.: theoretical and empirical analysis, writing original draft. J.H: literature review, formal analysis. X.S.: conceptualization, methodology, funding acquisition, and supervision.

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Correspondence to Ye Pan.

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Rao, S., Pan, Y., He, J. et al. Digital finance and corporate green innovation: quantity or quality?. Environ Sci Pollut Res 29, 56772–56791 (2022). https://doi.org/10.1007/s11356-022-19785-9

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