Greening the future: How can technology finance lead to green development?

Financing constraints remain an important barrier to technology-driven green development. Using a provincial panel of 30 mainland Chinese provinces from 2010 to 2023, this paper examines the relationship between technology finance and green development, focusing on green innovation, industrial restructuring, and regional variation. The results show a positive and statistically significant relationship between technology finance and GTFP-based green development. Further tests point to two main channels: green innovation and industrial restructuring. The relationship is stronger in provinces with weaker innovation capacity and in regions located southeast of the Hu Huanyong Line. These findings suggest that technology finance is not merely an additional source of capital. Its effectiveness depends on whether local economies can turn technology-oriented financial resources into green innovation and structural change.