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The impact of digital finance on green innovation: resource effect and information effect

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Abstract

To realize “the future we want” proposed by the UN Development Agenda, it is highly necessary for China, which is the largest emitter of carbon dioxide (CO2) emissions, to find ways to boost the green innovation of domestic firms. Digital finance, as an emerging product of the contemporary digital economy, provides a new research perspective for green innovation. Based on 2011–2019 panel data on A-shared listed companies in China, this article establishes a regression model and provides empirical evidence that digital finance can promote green innovation by exerting resource and information effects. Our results reveal that (1) digital finance can stimulate enterprises’ green innovation by increasing the coverage of digital finance and the depth of use. (2) Digital finance can significantly improve the quantity and quality of green innovation by alleviating enterprises’ financial constraints and giving full play to the internal and external information effect. (3) The discussion shows that the effect of digital finance is heterogeneous and can more significantly and effectively stimulate the green innovations of enterprises with lower analyst optimism bias and higher synchronicity.

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Data availability

The datasets used or analysed during the current study are available from the corresponding author upon reasonable request.

Notes

  1. The report titled Index system and index compilation of financial inclusion in China (2020) pointed out financial inclusion can be defined as a financial system that effectively and comprehensively provides services for all social strata and groups. Its original intention was to emphasize the continuous improvement of financial infrastructure, improve the availability of financial services and realize the provision of low-cost services to people from all walks of life. In particular, less developed areas and low-income people are provided more convenient financial services. We use the term digital finance throughout this article.

  2. The internal control database is the first professional and authoritative internal control information database in China. Based on the perspective of the five elements of enterprise internal control, namely, the internal environment, risk assessment, control activities, information and communication, and internal supervision, it is designed to build an internal control evaluation database. Internal control audit information, defects in the internal control evaluation library, internal control, internal control auditing defects identified in the standard library, internal control, the internal control information disclosure index, the number of internal control defects and the library included in the scope of enforcement of 9 are a database of listed companies. It objectively and truly reflects the internal control level of Chinese listed companies.

  3. The tool variable we selected was the geographical distance between each city and the central city calculated by STATA and Arc GIS.

  4. According to the 2020 Digital China and Digital Economy Development Report released by Tencent Research Institute, Shenzhen, Beijing and Shanghai are among the top cities in China in terms of urban digital economy development, which is a suitable reference system for calculating geographical distance. As for the reason why we choose Shenzhen rather than Guangzhou, because Shenzhen is close to Guangzhou and is also the headquarters of Tencent group, the development level of digital finance is relatively high.

  5. A large proportion of companies will set their headquarters and administration office in provincial capital city of the province they set.

  6. We adopt the 13-industry classification (A–M) system from the China Securities Regulatory Commission (CSRC). For the manufacturing industry (C), we use the two-digit CSRC industry code (C1–C9). Thus, we have 21 industries in total.

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Acknowledgements

The authors thank the editors and referees for their helpful comments and suggestions.

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  1. School of Economics and Management, Beijing University of Chemical Technology, No. 15, North Third Ring East Road, Chaoyang District, Beijing, 100029, China

    Yanxia Liu & Le Chen

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  1. Yanxia Liu
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This study was written and carried out by YL and LC. The two authors both contributed to the conception and design of the study. Data were collected by YL and LC. The results were analysed by YL and LC. The first draft of the manuscript was written by LC. The defects of the draft were critiqued by YL. The final draft was written by LC.

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Correspondence to Yanxia Liu.

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Liu, Y., Chen, L. The impact of digital finance on green innovation: resource effect and information effect. Environ Sci Pollut Res 29, 86771–86795 (2022). https://doi.org/10.1007/s11356-022-21802-w

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