Does the Chinese new diversified green finance affect corporate employee demand?

Previous studies have examined the impact of green finance on corporate financial performance; however, how green finance affects corporate no-financial performance, especially corporate employee demand, remains rarely explored. Utilizing city variations and time variations from 2017 Chinese Green Finance Reform and Innovation Pilot Zones (GFRIPZ) policy, the new diversified green finance, we investigate the impact of green finance on corporate employee demand. Results show that green finance from GFRIPZ would increase corporate employee demand by 14.22 % on average. Additionally, this effect is prominent in non-state-owned enterprises (NSOE), corporates in heavy-polluting industries, and corporates located in high-financial development cities. Mechanism analysis reveals that green finance would increase innovation transformation, especially recruiting more R&D staff, more non-executives and high-educated employees, rather than relaxing financing constraints or improving corporate governance to affect the corporate employee demand. Our paper significantly enhances the comprehensive understanding of how green finance influences non-financial performance through corporate employee demand management.