Will green financial policy help improve China's environmental quality? the role of digital finance and green technology innovation.

To speed up the transformation of green economy and promote the development of green finance, the Chinese government set up pilot zones for green finance reform and innovations in five provinces in 2017. This study constructs a quasi-natural experiment, and uses the difference-in-difference model to explore the impact of pilot zones for green finance reform and innovations policy on environmental quality for the first time. This study also examines the impact mechanism of the policy on environmental quality from the perspective of digital finance and green technology innovation for the first time. The results show that the environmental quality has been improved after the implementation of the pilot zones for green finance reform and innovations policy, and digital finance and green technology innovation have a significant intermediary effect in the process of green financial policy on environmental quality. Meanwhile, the policy effect has regional heterogeneity, with the policy effect in the east stronger than that in the central and western regions. The degree of marketization and informationization can promote the policy effect. This study provides important policy implications for the promotion of green finance reform and innovation pilot zones, and helps the government to evaluate the implementation effect of green finance policy.