How Does Green Bond Issuance Facilitate the Spillover Effect of Green Technology Innovation in Industry? Evidence from China

As the concept of balancing environmental protection and maintaining sustainable economic development has been widely recognized, the green bond is assuming an increasingly significant role within China's financial market. We utilize the data from China's A-share listed enterprises that issued bonds in the period 2010 to 2021 and try to examine whether and how green bond issuance facilitates the spillover effect of green technology innovation in industry. The results show that: (1) Green bond issuance can generate a spillover effect, greatly enhancing green technology innovation within the industry. (2) The spillover effect of green technology innovation from green bond issuance within an industry is more pronounced for state-owned enterprises, and relatively weaker for enterprises in Northeast China in the same industry. Relative to non-high-pollution industries, high-pollution industries reinforce the spillover effect. (3) Financing cost and agency cost are important influencing mechanisms for green bond issuance to improve peer enterprises' level of green technology innovation. Overall, the results provide theoretical support for encouraging the market for green bonds to maintain their development over the long term and for effectively promoting the transformation of the economy and society to a green and low carbon one.