Financial innovation, information screening and industries' green innovation-Industry-level evidence from the OECD

Financial innovation plays a crucial role in driving green innovation. Using patent data of 20 manufacturing industries and financial innovation data in 23 OECD countries from 1994 to 2009, this paper studies the impacts of financial innovation on green innovation from mechanism and empirical analysis. Our results show that financial innovation can significantly promote green innovation in industries that are more high-tech intensive. Using the mediation effect model, we find that the impact of financial innovation on industries' green innovation is achieved by improving financial intermediaries' ability to screen information. Then we find that although financial innovation has no obvious impact on the proportion of green innovation, it shows promotion effect in countries with stricter environmental regulations and lower degree of banking competition, as well as in industries with higher energy-intensity. Moreover, our study reveals that the promotion effect of financial innovation on green innovation is more significant among alternative energy innovation.

Automated summary

Financial innovation plays a crucial role in driving green innovation, particularly in high-tech intensive industries. It primarily promotes green innovation by enhancing financial intermediaries' ability to screen information. Furthermore, the promotion effect of financial innovation on green innovation is more significant in countries with stricter environmental regulations, lower banking competition, and industries with higher energy intensity.