Research on the Impact of Digital Transformation of Commercial Banks on Green Innovation

Abstract

Digital technology helps to reduce costs and increase efficiency and expand the scope of financial services, this paper focuses on the digital transformation of commercial banks, using panel data and related indicators of A-share listed companies from 2010-2023 to analyse the impact of digital transformation of commercial banks on green innovation. Firstly, the fixed effect model is used to study the effect of digital transformation of commercial banks on green innovation, and the results show that digital transformation of commercial banks can significantly promote green innovation, and the conclusion still holds after a series of robustness tests. Secondly, we empirically explore the impact mechanism of commercial bank digital transformation on green innovation, and find that commercial bank digital transformation promotes green innovation by alleviating financing constraints and improving corporate governance, while the increase in the level of financial marketisation stimulates the investor's tendency to make profits, which leads to the flow of funds to short-term investment, thus inhibiting the green innovation that requires long-term financial support. In this paper, we study the heterogeneity in terms of region, the regional heterogeneity shows that the promotion effect of digital transformation of commercial banks presents the strongest gradient in the east, the second in the centre and the weakest in the west. This study both opens a new path for how commercial banks' digital transformation can empower green innovation and further expands the knowledge boundary of digital finance-driven green innovation research.