How Do Government Guidance Funds Promote Green Innovation?

Using A-share listed companies from 2013–2021 as samples, this paper examines the impact of government guidance funds on corporate green innovation and their operating mechanisms. The research finds that government guidance funds can promote green innovation. Mechanism tests reveal that government guidance funds mainly promote corporate green innovation through mechanisms, such as encouraging R&D investment, increasing government subsidies, reducing financing costs, and mitigating executive myopia. Heterogeneity tests show that the positive correlation between government guidance funds and green innovation is more significant in companies with state ownership, higher proportions of institutional investors, and higher media attention. This paper enriches the research on government guidance funds and green innovation, providing theoretical reference for promoting industrial green transformation and sustainable development.