Businesses (Jan 2023)
Green Technology Innovation and Financial Services System: Evidence from China
Abstract
Green technology is the new trend for combining technology, innovation, and sustainability. However, China faces several problems in this regard, given the high cost of green products and services. To accelerate the establishment of green technology, it is necessary to solve the financial system problems faced by the various companies and to build a system that promotes green technology innovation. Based on an analysis of articles published in top international journals and official documents from 2016 to 2022 about the relationship between green technology and financial services in China, this paper tries to present specific policy recommendations to create a market that supports green technology in China. Our results show that the financial system must include, first of all, a model for financing and risk management at the level of the stock market, investment, insurance, and guarantees to face the reluctance of banks to lend. In addition, government incentives, including incubation, guarantees, interest rate subsidies, etc., mitigate the environmental externalities of green projects and limit the costs of financing green technology enterprises. Then, long-term funding needs to be provided to address the cost-effectiveness of selected green technology projects; and finally, the use of digital technology is required to improve green valuation capabilities and establish a set of environmental benefit definitions and valuation criteria that is suitable for green technology and green venture capital funds.
Keywords
