The impact of green technology innovation and firm default risk: benefit effect or risk effect?—evidence from the panel data on Chinese manufacturing firms

In the context of China’s strategic goal of carbon neutrality, the realization of green technology innovation to reduce the risk of manufacturing default will help promote the green transformation of firms and achieve high-quality economic development. The study explored the relationship between green technology innovation and default risk by taking the manufacturing industry of listed enterprises in China from 2001 to 2020 as research samples. The results showed that green technology innovation is negatively correlated with default risk. Moreover, the heterogeneity analysis showed that the benefit effect of heavy-polluting enterprises, state-owned enterprises, and large-scale enterprises was more significant. The mechanism analysis showed that green technology innovation can reduce default risk through market position and capital structure. In addition, the study further distinguished that environmental protection tax was conducive to green technology innovation to reduce the occurrence of default risk. In theory, the study expanded the research paradigm between green technology innovation and default risk in theory, and provided new evidence and enlightenment for reducing the default risk of enterprises and supported the green and sustainable development of enterprises in practice.