Does the Development of Digital Finance Contribute to Corporate Green Innovation? Evidence from China

This study uses Chinese A-share listed companies’ panel data from 2011 to 2020 as the research sample and constructs a fixed-effects model to explore the impacts of digital finance (DF) on corporate green innovation (GI). In particular, the impacts of three sub-dimensions of digital finance on corporate green innovation are also included. Based on the perspectives of information asymmetry and financing constraints, a mediating effect model is used to investigate the transmission mechanism. Heterogeneity analysis is also carried out to further identify the differential impact under different property rights nature, different regions, and different intensity of financial regulation and different level of investor short-sightedness. Results indicate that digital finance is helping companies achieve corporate green innovation. Compared to usage depth and digitalization level, the coverage breadth of digital finance is a major contributor. Digital finance promotes corporate green innovation by alleviating information asymmetry and easing financing constraints, and this promotional impact is greater in non-state enterprises, mid-western regions, and regions with weaker financial regulation and corporates with lower investor short-sightedness.