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Green innovation (GI) is increasingly recognised as an effective strategy for tackling climate change, mitigating environmental issues, and promoting sustainable development. Using panel data of the Chinese listed firms from 2007 to 2019, this study adopts the difference-in-differences approach to assess the impact of the green finance policy (GFP) initiated by the Chinese government in 2012 on the green innovation performance of firms. The findings reveal that the GFP significantly boosts the green innovation performance of heavily polluting enterprises (HPEs). Notably, this effect is more pronounced in state-owned enterprises and firms with high dependence on external finance. Compared with penalty-based regulations, incentive-based and voluntary environmental regulations demonstrate more significant moderating effects on the relationship between the GFP and green innovation performance for HPEs. We also identify improved efficiency in the usage of green investments as a potential mechanism through which the GFP enhances the green innovation performance of HPEs. Further comparative analysis shows that green enterprises can achieve simultaneous improvement in both the quality and quantity of green innovation, whereas HPEs predominantly exhibit enhancements in innovation quantity. To maximise the GFP's positive effects, it is recommended to facilitate more targeted bank lending towards HPEs to support their structural transformation. Additionally, the coordinated deployment of diverse environmental policy instruments is advised to exploit their synergistic effects. • This paper confirms the positive relationship between Green Finance Policy (GFP) and the green innovation. • We develop a novel machine learning approach to enhance the accuracy of variable measurements. • Firms with different ownership structure and external finance reliance are impacted differently by the GFP. • Both incentive-based and voluntary environmental regulations have positive moderation effects. • GFP can improve the green innovation by enhancing the green investment efficiency. [ABSTRACT FROM AUTHOR]

Haze pollution caused by particulate matter such as PM2.5 and PM10 significantly affects public health. Confronted with haze pollution, people have increasingly taken to expressing opinions online to demand restrictions on pollution discharge by enterprises to protect their health rights. However, are such public demands met by the government and incorporated into policy agenda relating to environmental regulation policies? To investigate this question, this study employed text content analysis to examine the role of public opinion as an intermediary in the relationship between haze pollution and the formulation of environmental regulation policies, using a dataset of 460 environmental regulation policy documents and over 800,000 public opinions on environmental issues spanning from January 2011 to December 2021. We found that public opinion exerted a significant intermediary effect by linking haze pollution and environmental regulation policy tools. Further analysis revealed heterogeneity in the influence of public opinion on environmental regulation policy tools. Public opinion exhibited the most substantial intermediary effect on command-control policy tools (with a 6.68% intermediary effect), followed by economic incentive policy tools (4.65%) and social autonomy policy tools (4.58%). Additionally, there was a notable time lag in the impact of public opinion on environmental regulation policy tools. It took approximately 7–10 months for the government to respond to the disseminated public opinions. This study may shed light on how the government can encourage public engagement, respond to, and guide public opinion. [Display omitted] • Public opinion plays an intermediary role between haze and regulatory policy. • 7–10 months' time lag of environmental policy to public opinion was estimated. • The heterogeneity in the impact of public opinion on three policy tools was analyzed. [ABSTRACT FROM AUTHOR]