How Does Green Insurance Affect Green Innovation? Evidence from China

In the context of the rapid development of green finance, this paper examines the impact of green insurance on green innovation. Based on panel data of listed firms from 2008 to 2020, we find that green insurance significantly increased firms’ green patent applications. The mechanisms driving this positive relationship between green insurance and green innovation include that the insured firms are able to obtain more resources, are more willing to take risks, and are more likely to have a long-term vision. Further analysis shows that green insurance can enhance a firm’s environmental performance by promoting green innovation. This study deepens our understanding of green insurance and enriches the research related to green finance.