The effect of enterprise financialization on green innovation: evidence from Chinese A-share non-financial listed enterprises

The financialization of entity enterprises brings both benefits and risks for economic development. In the context of green economy transformation, exploring the impact of enterprise financialization on green innovation deserves more focus. This paper takes the A-share non-financial listed companies from 2007 to 2021 as the research sample to examine how corporate financialization affects green innovation. The results reveal that the enterprise financialization is negatively associated with green innovation, which is more significant for the short-term financialization. Further analysis shows that external supervision governance (institutional investors and analysts’ attention) can alleviate the hindering effect of corporate financialization on green innovation. The mechanism tests confirm that enterprise financialization prevents enterprise green innovation by increasing enterprise risk-taking level and reducing R&D investment (capital input and labor input). Heterogeneity analysis reports that higher consumer eco-friendly preference and consumption level can ease the hindering effect of corporate financialization on corporate green innovation. This paper can provide inspiration for enterprises to reasonably arrange asset investment and how to stimulate enterprises’ enthusiasm for green innovation, thus powering the green development of the real economy.