How does green finance promote renewable energy technology innovation? A quasi-natural experiment perspective

The importance of green finance policies, particularly in the realm of innovation in renewable energy technologies, should not be overlooked while assessing the advancement of renewable energy development in China. The objective of this study is to investigate the impact of green finance reform initiatives on the promotion of renewable energy technology innovation (RETI) within cities of China. To accomplish this objective, this study employs the 2017 Green Finance Reform and Innovation Pilot Zones (GFRIPZ) policy as a quasi-natural experiment. A difference-in-differences (DID) model is employed to construct the study framework. The research findings highlight that the implementation of pilot zones has resulted in a substantial and favorable influence on RETI. Moreover, the observable effectiveness of this phenomenon in fostering RETI is predominantly observed in the eastern region of China, small-scale cities, and locations characterized by stringent environmental restrictions. Additionally, our findings demonstrate that this particular policy has an indirect impact on promoting RETI. This is achieved through the improvement of the allocation of financial resources dedicated to green initiatives. These insights offer valuable guidance for policymakers aiming to promote sustainable energy innovation and green development.