We kick something around with the "combined effect" of five green financial conditions, including green insurance, green bonds, green credit, green investment, and green subsidies, on the green innovation of firms in order to investigate the factor allocation in various scenarios. This paper uses fsQCA to collect sample case data from 31 provinces (333 cities) in China. The outcomes of necessity analysis indicate that none of the five antecedents under the green finance system can provide necessary conditions for firms’ green innovation alone. Firm green innovation is the result of multiple conditions, collaborative interaction, and joint action. The results of adequacy analysis indicate that various antecedent configurations can lead to both high-level and non high-level green innovation. There are four driving paths for high-level green innovation in businesses, which can be summarized as two adaptation models, namely insurance-subsidy driven and bond-subsidy driven. Green subsidy is the most crucial factor in enhancing green innovation among Chinese enterprises. In addition, the performance of green innovation in firms is influenced by multiple antecedents, and the impact of each antecedent on the performance of green innovation in businesses is asymmetric. We offer the following recommendations for the implementation process of green innovation in businesses based on the aforementioned study findings.
(1) Green subsidy is the core indicator for companies to achieve high-level green innovation, indicating that the government should increase funding to inspire companies to carry out green innovation activities. Enterprises can establish a positive external environment and advance their green transformation process by receiving financial support for green innovation. To help businesses conserve energy and reduce emissions using green finances, create a low-carbon economy, as well as attain sustainable economic growth, green financing is being developed. Policy makers should attach importance to providing financial support to enterprises and minimize the risks of green innovation by expanding financing channels. However, relying solely on government funding is far from enough. Green insurance can, on the one hand, encourage businesses to cut carbon emissions and raise the bar for green innovation. On the other side, a favourable climate for green bond issuance might pique businesses' interest in eco-friendly innovation. For businesses engaged in technological research and development, supporting their green finance, green insurance, and green credit activities should be a priority for relevant financial institutions.
(2) Fully leverage the role of green finance in fostering eco-friendly innovation and promoting superior economic development. To increase innovation in green credit, raising the bar and expense for polluting organizations to access financial resources is also important in order to solve the issues with information asymmetry and poor credit allocation that green businesses confront. To secure the long-term growth of green innovation activities, get varied financing sources through the risk management and resource allocation aspects of green finance. Promote green investment of enterprises to play its role in improving environmental governance. Although green investment occupies a certain amount of financial funds of enterprises, it is a requirement for enterprises to accomplish green innovation and can, in some cases, improve environmental quality. In addition, green insurance provides comprehensive insurance services for environmentally friendly and low-carbon transformation, and it positively influences social development, environmental protection, and the progress of social civilization. The insurance industry should fully leverage the advantages of green insurance to help attain the "dual carbon" goals, as well as continuously improve the risk protection capabilities of enterprises in response to green innovation.
(3) Establish a monitoring mechanism for green funds, strictly control the expenditure of green funds, and reduce the risk of green innovation. The government should hasten the advancement of the green finance audit system, according to the article's conclusion, and fully utilize the guiding function of green finance in resource allocation. On the one hand, simplify the application procedure for environmentally friendly, green and low-carbon industries. In the meantime, more social capital should be directed and encouraged to invest in the green economy. In the approval process, priority should be given to green innovation projects, and credit penalties should be imposed on fake green companies and illegal green investment. On the other hand, enhancing the ease of funding for green funds, alleviating corporate financing constraints, and ensuring adequate financial support for business green innovation. Raising the environmental threshold for polluting enterprises to access green financial resources forces them to innovate green.
Our study adds to the body of literature in three different ways. Firstly, this article obtains 4 high-level green innovation configuration paths and 2 non high-level green innovation configuration paths, demonstrating through empirical research how green finance may encourage green innovation in Chinese businesses. The experimental outcomes prove that the various conditions of green finance interact to form a diversified configuration, and drive the green innovation of companies in a way of achieving the same goal by different routes. Our research findings will help managers discover potential ways to combine different conditions to achieve high-level green innovation performance. Secondly,We have uncovered the intricate interactive relationship between green finance and green innovation, which not only serves as a theoretical guide and source of practical inspiration for decision-makers, but also encourages the fusion and growth of green finance and innovation theory. We have shifted the focus of the green innovation driven model of firms from the impact of single layer antecedent conditions to the linkage effect of multiple antecedent conditions. Meanwhile, We underline the need for the government to expand financial support for businesses, as doing so considerably improves the effectiveness of focused efforts to raise businesses' levels of green innovation. Thirdly, we have introduced fsQCA, which helps to broaden the selection of methods in the study of green innovation. The majority of study to date has concentrated on the impact of single level elements, lacking systematic and holistic analysis. To systematically integrate the five factors of green finance, we use the fsQCA approach. We provide a new perspective for the complex interaction and causal asymmetry among the various conditions behind green innovation in firms.
At the same time, this study still has some shortcomings and opportunity for improvement. Firstly, due to the limitations of data collection methods and our personal experience and knowledge, we only selected 5 antecedents and did not explore any more, nor did we cover all industries. In the future, more comprehensive factors can be identified for more in-depth research, in order to increase the universality of our conclusions. Secondly, the sample cases are all from China. Enterprise samples from industrialized nations can be added to QCA to further enhance our research conclusions.