Nurturing finance and harvesting intelligence: The green growth of urban industrial intelligence fueled by green finance

This paper introduces the novel concept of Urban Industrial Intelligent Green Growth (UIIGG) to assess the influence of green finance policies in China, utilizing panel data from 225 cities across 30 provinces from 2008 to 2021. Our analysis finds that regions with green finance pilot policies show a significant increase in UIIGG, with fiscal expenditures and government financing playing pivotal roles in fostering green growth. Furthermore, we explore the mechanisms through which green finance policies influence UIIGG, examining both market-based and non-market-based policy instruments. Notably, we find that environmental fiscal expenditures and government financing support have a more pronounced effect on fostering UIIGG than policy constraints and carbon transactions. Our interaction analysis further shows diminishing returns when similar instruments are paired, whereas combining market- and non-market tools produces complementary, mutually reinforcing effects. Especially in cities with weaker UIIGG foundations and underdeveloped pilot provinces, the implementation of green finance policies yields more favorable outcomes. These findings not only contribute to advancing institutional theory, innovation theory, and investment incentive theory but also underscore the importance of targeted policy interventions in promoting sustainable urban-industrial development.