A Study On The Impact Of Competition In The Banking Sector On Corporate Green Innovation

With rapid economic development,the environmental disadvantages of the crude economic development model are becoming increasingly apparent.Green technology innovation has become a win-win way to achieve economic growth and environmental protection,contributing an important force to sustainable economic development.People’s awareness of environmental protection is increasing,and the call for enterprises to assume environmental responsibility is becoming stronger and stronger,and green development is receiving more and more attention.At the same time,capital is a key element for the smooth implementation of enterprises’ green innovation activities.As an important source of credit funds for enterprises in China,changes in the degree of competition and competition structure of banks will certainly have an impact on enterprises’ green innovation activities.By studying the relationship between competition in the banking industry and corporate green innovation,we can not only provide some guidance suggestions for the future development direction of China’s banking industry,but also provide new ideas for solving the funding problems faced by Chinese enterprises in their green transformation.This paper explores the relationship between bank competition and corporate green innovation.Specifically: the paper begins with a review and summary of the literature on bank competition and firm innovation.The paper then proposes hypotheses based on optimal financial structure theory,industrial organisation theory and technological innovation theory.Next,an attempt is made to examine the relationship between banking competition and corporate green innovation through firm-level data.The article examines the impact of banking competition on corporate green innovation activities based on data from Chinese listed firms from 2007-2019.The main findings of this paper are: firstly,an increase in the degree of bank competition will have an impact on promoting the level of green innovation of enterprises;secondly,bank competition can promote green innovation of enterprises through three ways: alleviating enterprises’ financing constraints,improving operational efficiency and reducing agency costs;furthermore,the relationship between banking competition and green innovation of enterprises is influenced by enterprise heterogeneity,and the level of green innovation of enterprises is promoted by bank competition The promotion effect of bank competition on the level of corporate green innovation is more pronounced for firms with small size,low leverage level and no government subsidies;finally,further research finds that bank competition has a long-term effect on corporate green innovation,which is conducive to the long-term development of corporate green projects,and the reliability of the empirical results is ensured through the substitution variable and instrumental variable methods.Based on the empirical results,this paper proposes the following policy recommendations: firstly,in order to stimulate the vitality of green innovation in SMEs,the development of small and medium-sized banks should be fully supported;secondly,policies should support banking institutions to provide diversified financing products as far as possible,so as to give sufficient financial support to enterprises that are active in green innovation and research and development;finally,enterprises themselves should enhance their awareness of green innovation,seize market opportunities and allocate funds to green research and development activities rationally,so as to enhance their core competitiveness in the market.