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Green finance (GF) is a new financial service that supports green and low-carbon (GLC) transformation. Whether green finance (GF) can effectively improve regional green innovation performance (GIP) by optimizing resource allocation and increasing factor input is a key question for achieving sustainable development goals (SDGs): environmental, economic, and society. Based on panel data from 30 provinces in China from 2007 to 2021, this paper explores the impact of GF on GIP and analyzes the mechanisms of the effect. The findings of this paper indicate that GF plays a significantly positive role in promoting regional GIP, increasing both quantity and quality. Heterogeneity analysis reveals that GF has a considerable incentive effect on carbon reduction technology, and the innovation incentive effect of GF is much greater in regions where the attention paid to the environment is high or there is a low natural endowment. Mechanism analysis reveals GF improves GIP by optimizing financial resource allocation and increasing R&D factor input. Therefore, this paper proposes the following suggestions: (1) The central government should improve the top-level design of the GF policy system and provide financial support for GLC transformation and the achievement of SDGs. (2) Local governments should explore diversified development paths for GF according to their own characteristics, stimulate market entities’ enthusiasm for GLC transformation, and improve regional green innovation performance so as to achieve coordinated and sustainable development of the environment, economy, and society.
Jin et al. (Sat,) studied this question.