Green finance and green growth: do green technological innovation and financial constraints matter?

Green finance is an effective means to achieve both economic growth and ecological sustainability. Using Green Finance Reform and Innovation Pilot Zone policy in 2017, 2019 and 2022 as a quasi-natural experiment respectively, this study combines panel data from Chinese cities spanning 2008 to 2022 and employs a multi-period Difference-in-Differences model to examine the impact and underlying mechanisms of green finance policy on regional green growth. The results show that green finance policy significantly promotes regional green growth, and this conclusion remains robust after a series of validation tests. Mechanism analysis reveals that enhancing green technology innovation and alleviating financial constraint are two key channels through which green finance policy drives green growth. Heterogeneity analysis further indicates that the positive effects of green finance policy are more pronounced in cities with lower financial development, stricter environmental regulations, stronger government intervention, and resource sufficient. Additional analysis demonstrates that green finance policy also contributes to improving regional economic performance. This study enriches the theoretical understanding of green finance policy from a macro perspective and provides empirical evidence for promoting sustainable regional development.