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Unlocking sustainable growth: exploring the catalytic role of green finance in firms’ green total factor productivity

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Abstract

Promoting the development of green finance (GF) is a critical way to address the environmental and developmental problems in China. While existing studies have examined the macroscopic role of GF, few pay attention to its impact on micro-enterprises. To investigate the effect of GF on micro-enterprises, this study considers green credit as a quasi-natural experiment to investigate the effect on firms’ green total factor productivity (GTFP). We use the SBM-Malmquist method to measure firms’ GTFP and adopt the double dual machine learning approach to explore its impact and potential mechanisms. The findings indicate that (1) the GF can effectively promote the GTFP at the firm level, which has been reconfirmed by robustness tests. (2) The GF can improve firms’ GTFP through three pathways: promoting firms’ green innovation, alleviating financing constraints, and strengthening managers’ environmental concerns. (3). The heterogeneity analysis verifies that state-owned enterprises and large-size firms are more sensitive to the response of green finance. The results of this study lend support to the establishment of green finance and the formulation of corporate green development strategies.

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Data availability

The datasets generated and analyzed during the current study are property of the National Bureau of Statistics; they are available from the corresponding author who will inform the National Bureau of Statistics that the data will be released on reasonable request.

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Funding

This study was financed by Huazhong University of Science and Technology Special Funds for Development of Humanities and Social Sciences.

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Authors and Affiliations

  1. School of Law and Business, Wuhan Institute of Technology, Wuhan, Hubei Province, China

    Da Gao, Xiaotian Zhou & Xiaowei Liu

  2. School of Economics, Huazhong University of Science and Technology, Wuhan, Hubei Province, China

    Xinlin Mo

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  1. Da Gao
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  2. Xiaotian Zhou
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  3. Xinlin Mo
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  4. Xiaowei Liu
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Contributions

Da Gao and Xiaowei Liu conceived and designed the research question. Xiaotian Zhou constructed the models and analyzed the optimal solutions. Da Gao and Xinlin Mo wrote the paper. Da Gao and Xiaowei Liu reviewed and edited the manuscript. All authors read and approved the manuscript.

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Correspondence to Xiaowei Liu.

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Gao, D., Zhou, X., Mo, X. et al. Unlocking sustainable growth: exploring the catalytic role of green finance in firms’ green total factor productivity. Environ Sci Pollut Res 31, 14762–14774 (2024). https://doi.org/10.1007/s11356-024-32106-6

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