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Can green bonds empower green technology innovation of enterprises?

  • Green Development and Environmental Policy in China: Past, Current and Future
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

Green bonds, a new green financial instrument, encourage enterprises to achieve high-quality development through green technology innovation. However, a lack of research is currently being conducted into the effect of green bond issuance in China. Can green bonds effectively empower enterprises to green innovation? What is the underlying mechanism? In the context of carbon-neutral strategies, it is significant to answer these questions scientifically. This paper uses a quasi-natural experiment of the launch of the green bond market in China in 2016 to conduct empirical studies based on the panel data of 1 558 non-financial Chinese-listed enterprises from 2015 to 2020 with the multi-period difference-in-difference model. The results show that ① issuing green bonds can significantly empower enterprises’ green technology innovation. The empowering effect is mainly for green utility patents rather than green invention patents. This result remains after dynamic heterogeneity analysis, placebo test, and other tests. In addition, the effect has a lag. ② Heterogeneity tests show that this empowerment effect varies across enterprises with different property rights, industries, and regions. ③ In terms of the mechanism of action, green bonds can enhance enterprises’ ability to innovate green technology by increasing the proportion of long-term loans and improving their debt structure. This paper broadens the relevant literature on the economic consequences of green bonds and the influencing factors of enterprises’ green technology innovation and provides policy suggestions for further improving the analysis of green bonds.

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Data availability

Data and materials are available from the authors upon request.

Abbreviations

CSMAR:

China Stock Market & Accounting Research Database

CSRC:

China Securities Regulatory Commission

ST:

special treatment

Gaptatent:

green technology Innovation

Treat:

dummy variable for the treatment group and the control group

Post:

policy time dummy variable

D:

the cross-product term of treat and post

LDR:

the ratio of long-term borrowing to the total debt of the enterprise

Size:

total assets at the end (logarithm)

Debt:

total liabilities/total assets

Tangibility:

net fixed assets/total assets

ROA:

net profit/average total assets

Growth:

operating income growth rate

Cash:

net cash flow from operating activities/total assets

Top1:

percentage of shareholding of the largest shareholder

Board:

number of independent directors/number of board of directors

Age:

years of business establishment (logarithm)

Employee:

number of employees (logarithm)

Tobin’s q:

corporate Tobin’s Q

i:

enterprise

t:

year

α:

constant term

β:

coefficient

X:

control variables

γ:

firm fixed effects

μ:

year fixed effects

ε:

residual error term

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Funding

This work is supported by the National Natural Science Foundation of China (grant nos. 71673117 and 72004082) and Philosophy and Social Sciences Excellent Innovation Team Construction foundation of Jiangsu province (grant no. SJSZ2020-20).

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Authors and Affiliations

  1. School of Finance and Economics, Jiangsu University, Zhenjiang, 212013, China

    Jijian Zhang, Guang Yang, Xuhui Ding & Jie Qin

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  1. Jijian Zhang
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  2. Guang Yang
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Contributions

Jijian Zhang conceived the topic, combed the relevant literature, and wrote the first draft. Guang Yang chose metrics, built models, and wrote this paper. Xuhui Ding collected and collated the data. Jie Qin collected the data and corrected this paper.

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Correspondence to Jijian Zhang.

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Zhang, J., Yang, G., Ding, X. et al. Can green bonds empower green technology innovation of enterprises?. Environ Sci Pollut Res 31, 10032–10044 (2024). https://doi.org/10.1007/s11356-022-23192-5

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