Green Technology Innovation and Financial Services System: Evidence from China

3. Financing Bottlenecks Faced by Green Technology Investments

Green technologies are emerging technologies that reduce energy consumption, pollution, and carbon emissions and improve ecology.

The green technology innovation system covers energy conservation and environmental protection, clean production, clean energy, ecological protection and restoration, infrastructure, ecological agriculture, and other fields, as well as product design, production, consumption, and recycling.

In terms of actors, the components of the green technology innovation system mainly include enterprises, research institutions, the government, and financial institutions.

The enterprises are the main body of green technology innovation and are the demanders, initiators, and implementers of green technology innovation. Research institutions are important intellectual providers of green technology innovation.

A good interaction between research institutions and enterprises is an important support for green technology innovation. The government is the incentive and beneficiary of green technology innovation.

On the one hand, the government’s incentive policies and mechanisms can largely promote the participation of green technology enterprises, research institutions, and financial institutions in green technology innovation, and on the other hand, green technology innovation is also conducive to the construction of ecological civilization and sustainable development at all levels of government.

Green technology innovation is also conducive to the realization of the objectives of ecological civilization and sustainable development by governments at all levels.

Although the government has issued several policy documents to support green technology innovation, at present, green technology investment by enterprises in China is still insufficient.

For example, the China Environmental Protection Industry Association (CEPIA), published in 2018, shows that The R&D expenditure of nearly 10,000 environmental protection enterprises that were surveyed accounted for 3.0% of their business revenue: a slight increase from the previous year [15].

This is slightly higher than the level of R&D expenditure of industrial enterprises above the national scale but still lower than the average of 3.8% in developed countries [16]. For example, in Germany, the R&D expenditure of environmental manufacturing enterprises is generally 4% of their operating income [17]. Another example is the UK’s low-carbon and environmental service companies in the UK invest, which obtains about 5% of its total revenue in R&D [


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