The Impact Of Green Finance On The Transformation And Upgrading Of Manufacturing Industry

China’s economy has achieved rapid growth in the past forty years.The proportion of the total economic volume in the world has made a leap from 1.8%in 1978 to 16%in 2017.making China the second largest economy globally.The manufacturing industry,as the foundation of the country,plays an important role in supporting economic development and participating in international competition.However,China’s past economic growth model is a extensive one,which has brought an increasing burden on resources and the environment.It is obviously not be able to meet China’s increasing demand for quality of economic growth if China still keeps the high-investment,high-consumption and low-cost way of developing.The development of the manufacturing industry also suffers from problems such as a surplus of low-end products,serious environmental pollution and low efficiency in energy consumption.In this context,the emergence of green finance is an important way to promote the transformation of the extensive model.Green finance refers to the financial services provided for various economic activities that support environmental improvement,climate change and the economical and efficient use of resources.Green finance can eliminate backward production capacity through capital allocation and promote China’s supply-side structural reform.As an important financial means of environmental protection,whether green finance can guide China’s manufacturing industry to upgrade or transform by restricting the flow of funds into high-polluting enterprises and providing funds for energy-saving and environmentally friendly enterprises is the issue concerned by this paper.And this issue has certain research significance at the practical level and theoretical level.On the one hand,the manufacturing industry is gradually slowing down under the rising cost of domestic labour,land and other resources and changes in the international Political and Economic environment.For boosting the sustainable development of the manufacturing industry,transformation and upgradation has become an indispensable part of the road to develop.Therefore,it is of great practical significance to deeply study the topic.On the other hand whether the relevant policies promulgated by the government can drive the transformation and upgrading of traditional manufacturing industries is a question worth exploring.This paper summarizes the literature related to manufacturing transformation and upgrading and green finance,clarifies the concepts of manufacturing transformation and upgrading and green finance,and gives an overview of the development status of both.In terms of empirical evidence,the index system of green finance is constructed with reference to relevant studies,and the indicators of structural heightening and cleanliness of manufacturing are calculated.A fixed-effects model is used to regress the manufacturing transformation and upgrading indicators as well as the green finance indicators,and the mediating role played by technological innovation ie explored.Finally,the regression results of this paper are verified through robustness analysis and instrumental variables method.Based on the above literature and empirical analysis,the paper concludes that the development of green finance has positive effects on the transformation and upgrading of the manufacturing industry,while technological innovation plays a mediating role in the relationship between them,which is saying that green finance can facilitate technological innovation.Then technological innovation will promote the transformation and upgrading of the manufacturing industry.