Facilitating net-zero emissions goals through green finance: Enhancing efficiency in corporate green innovation within a two-stage value chain framework

Abstract

Green finance plays a crucial role in reducing corporate carbon emissions. However, the mechanisms linking green finance to emission reduction remain underexplored. This study examines 1399 Chinese listed companies from 2013 to 2022 to evaluate the carbon-reducing effects of the Green Financial Reform and Innovation Pilot Zone (GFRI). Using a two-stage value chain framework, we decompose green innovation into green technology research and development and green outcomes transformation to analyze the transmission mechanisms. The results show three key findings. First, the implementation of the GFRI significantly reduces corporate carbon emissions, and the results are robust across specifications. Second, the policy effect is stronger among firms in the central and eastern regions and in the manufacturing sector. Third, the carbon reduction effect of the GFRI is primarily driven by improvements in green innovation efficiency. Green outcomes transformation efficiency plays a more critical role than green technology research and development efficiency. These findings suggest that firms should accelerate green innovation processes and strengthen internal regulatory mechanisms to increase the effectiveness of green finance policies in promoting carbon reduction.