The green intentions of capital: How green finance is changing the boundaries of corporate sustainability strategies.

This study investigates how green finance affects the sustainability performance of Chinese publicly listed companies through multiple channels. Using a firm-year panel dataset from 2011 to 2022 and constructing a Green Finance Development Index (GFIN), we assess the impact of green finance on corporate sustainability, measured by a customized Sustainability Growth Rate (SGR) index. The analysis employs fixed effects models and multiple endogeneity controls, including 2SLS, Heckman's two-step method, and system GMM estimations. The results consistently show that green finance significantly improves corporate sustainability. Mechanism tests reveal that green finance operates through four main pathways: promoting green technological innovation, increasing media attention, alleviating financing constraints, and reducing administrative expenses. Further, heterogeneity analyses indicate that the positive effects of green finance are more pronounced in non-state-owned enterprises, non-manufacturing firms, and high-pollution industries. Moreover, environmental and financial regulations positively moderate the relationship between green finance and corporate sustainability, enhancing its effectiveness and reducing risks of greenwashing. This research contributes to the literature by integrating institutional theory with resource-based views to explore how green finance shapes firms' internal strategic behavior and external accountability mechanisms. It also offers practical insights for policy formulation.