{"title":"Fiscal reform and green innovation: Evidence from China's local debt management reform","authors":"Tian Li , Feng Qi","doi":"10.1016/j.frl.2025.106937","DOIUrl":null,"url":null,"abstract":"<div><div>This quasi-natural experimental study examines how China's local government debt management reform affects corporate green innovation. The findings show that the reform significantly promotes green innovation by reducing financial constraints and efficient resource allocation. Mechanism analysis reveals that while higher default risk strengthens the effects of the reform, firms with higher total factor productivity (TFP) benefit more from resource optimization and policy incentives. Heterogeneity analysis shows stronger impacts in regions with less developed markets and firms with high capital density. These findings are confirmed through robustness tests. This study underscores the importance of macroeconomic policies in driving sustainable development and corporate innovation.</div></div>","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"76 ","pages":"Article 106937"},"PeriodicalIF":7.4000,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Finance Research Letters","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1544612325002016","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This quasi-natural experimental study examines how China's local government debt management reform affects corporate green innovation. The findings show that the reform significantly promotes green innovation by reducing financial constraints and efficient resource allocation. Mechanism analysis reveals that while higher default risk strengthens the effects of the reform, firms with higher total factor productivity (TFP) benefit more from resource optimization and policy incentives. Heterogeneity analysis shows stronger impacts in regions with less developed markets and firms with high capital density. These findings are confirmed through robustness tests. This study underscores the importance of macroeconomic policies in driving sustainable development and corporate innovation.
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