Green finance policy and exploratory and exploitative green innovation: evidence from high-polluting enterprises in China

This paper investigates the effects of green finance policy (GFP) on exploratory and exploitative green innovation outcomes of high-polluting enterprises (HPEs) utilizing empirical data from China’s publicly listed companies spanning from 2008 to 2021. The GFP can enhance exploitative green innovation but hinder exploratory green innovation. The relationship between GFP and exploratory and exploitative green innovations is partly influenced by debt financing capacity. Environmental information disclosure can moderate the relationship between the GFP and the debt financing capacity. The results indicated that the innovation strategy of HPEs has changed because green finance resources are less allocated to them and their debt financing capacity is limited under GFP. However, HPEs can regain market recognition and funds support by conducting high-quality environmental information disclosure, implying that GFP still has defects and needs to be improved. The outcomes of our study offer recommendations for the execution of China’s green finance policy.