Corporate financialization and green technological innovation: Evidence from China

Corporate financialization and changes in the external financial environment have important but unexplored implications for firms' green technological innovation (GTI). Taking a sample of non-financial listed companies in China's A-share market from 2010 to 2020, and using panel and mediation models, this paper investigates the role of corporate financialization on GTI. We reveal that: (1) corporate financialization notably dampens GTI, especially substantive GTI. (2) The “crowding-out” effect proved the main mechanism by which corporate financialization affects GTI and there was no “reservoir” effect during the sample period. (3) Corporate financialization has a larger dark impact on GTI when firms with higher environmental, social, and governance scores and levels of industrial innovation, lower levels of digital financial development and industrial knowledge spillovers, and when firms are younger or non-state owned.