EMPIRICAL ANALYSIS ON THE EFFECT AND MECHANISM OF GREEN FINANCE RELATING TO REDUCTION AND CARBON EMISSION REDUCTION RELYING ON THE EMPIRICAL EVIDENCE FROM CHINESE LISTED COMPANIES

In the process of implementing the "dual-carbon" strategy, research on whether green finance can truly translate into emission reduction effects and its conversion mechanism is crucial for testing green finance policies. The present study takes A-share listed non-financial enterprises in China from 2011 to 2022 as samples, matches enterprise emission data of sulfur dioxide (SO 2 ), nitrogen oxides (NO x ), and soot, and constructs a "firm-year" green finance index built on seven types of tools including green credit and green bonds to systematically examine the impact of green finance on corporate pollution reduction and carbon emission reduction. Baseline regression results show that for each 1-unit rise in the green finance index, the logarithm of total corporate pollutant emissions decreases by an average of 0.366, and this conclusion stays robust after instrumental variable and robustness examinations. Mechanism analysis reveals that green finance exerts its effects through a dual-pathway of alleviating financing constraints and promoting green technological innovation: on one hand, it significantly reduces the SA index, providing low-cost funds for corporate green investments; on the other hand, it significantly increases the quantity of applications submitted for green utility model patents, facilitating process upgrading and end-of-pipe treatment. Heterogeneity tests reveal that the emission reduction effect of green finance stands out more in non-state-owned enterprises (non-SOEs), eastern regions, and the manufacturing industry, presenting a pattern of "non-SOEs outperforming SOEs, eastern regions outperforming central and western regions, and manufacturing outperforming non-manufacturing". This study provides micro-level evidence for constructing a precise and efficient green finance support system, and also offers actionable policy references for accomplishing the "dual-carbon" goals.