This paper examines how green finance affects the green transformation of enterprises. It uses data from Chinese A-share listed companies from 2008 to 2023 to analyse the mechanisms and impacts. Our findings reveal that enhancing green finance development significantly drives enterprise green transformation, even after rigorous robustness tests and assessments of endogeneity. Green finance exerts its influence through the "risk effect" by mitigating financing constraints and environmental uncertainty, thereby facilitating enterprise green transformation. External governance mechanisms, such as environmental regulations, and internal governance mechanisms, including organizational slack and internal controls, both strengthen the effectiveness of green finance in promoting enterprise greening, supporting the "monitoring effect" hypothesis. Notably, green finance has a more pronounced impact on state-owned and high-carbon enterprises, as well as on enterprises located in regions with more developed comprehensive factor markets. This study offers valuable insights for designing effective enterprise transformation strategies and provides policymakers with practical guidance for promoting sustainable and environmentally responsible business practices.
Fu et al. (Mon,) studied this question.