How does transition finance influence green innovation of high-polluting and high-energy-consuming enterprises? Evidence from China

Abstract Under the impact of "double-carbon" target, transition finance has an important impact on green innovation of Chinese double-high enterprises. Using a sample of 4270 high-polluting and high-energy-consumption listed enterprises(referred to as double-high enterprises) in China from 2012 to 2021, this paper empirically examines the impact of transition finance on the green innovation of China's double-high enterprises by using a fixed-effects model. The study finds that transition finance can have a facilitating effect on green innovation in double-high enterprises. The intermediary mechanism test shows that transition finance can promote green innovation of double-high enterprises through alleviating financing constraints, increasing the level of green management, and enhancing the policy orientation effect. The heterogeneity test finds that transition finance promotes green innovation more significantly for the double-high enterprises that are state-owned, large-scale, and located in regions with high levels of intellectual property protection. Further research finds that the role of transition finance in promoting green innovation in double-high enterprises helps to promote the achievement of green development of double-high enterprises.