Any major socio-technical transition requires a fundamental re-direction of financial capital from incumbent to new technologies and practices. While the transitions literature conceptually covers financial markets, the role of finance is marginalized and has scarcely been analysed empirically. To address this gap, here we build on the multi-level perspective (MLP), which considers financial markets as part of the existing regime. We argue that the role of finance is highly relevant for the niche-regime interaction: Redirecting finance towards new niche technologies requires that either the niche is fit for and conforms to the financial regime's expectations or the financial regime is stretched and transformed in order to accept and finance niche technologies. Based on 56 interviews, we identify factors that determine interactions between the financial regime and technology niches: these include acceptable risk and transaction size, an abundance of knowledge and heuristics in both the regime and niche, and an extensive, existing industry network. We further analyse how State Investment Bank (SIB) interventions in Germany, the UK and Australia, aimed to mobilise private finance into low-carbon project development, affect the interaction between the technology niche and financial regime, i.e. whether they resulted in fitting-and-conforming the technological niche for the financial regime or stretching-and-transforming the financial regime. Our results point to several important effects of SIB interventions, with most effects fitting the niche to the regime. However, we also detect effects that stretch and transform the financial regime – through evolutionary processes. Importantly, some effects occur as a consequence of the primary effects. Based on our findings we discuss policy implications on how to accelerate transitions through policies aiming at finance as well as theoretical insights gained through our analysis.

Reaching a better understanding of the policies and politics of transitions presents a main agenda item in the emerging field of sustainability transitions. One important requirement for these transitions, such as the move towards a decarbonized energy system, is the redirection and acceleration of technological change, for which policies play a key role. In this regard, several studies have argued for the need to combine different policy instruments in so-called policy mixes. However, existing policy mix studies often fall short of reflecting the complexity and dynamics of actual policy mixes, the underlying politics and the evaluation of their impacts. In this paper we take a first step towards an extended, interdisciplinary policy mix concept based on a review of the bodies of literature on innovation studies, environmental economics and policy analysis. The concept introduces a clear terminology and consists of the three building blocks elements, policy processes and characteristics, which can be delineated by several dimensions. Based on this, we discuss its application as analytical framework for empirical studies analyzing the impact of the policy mix on technological change. Throughout the paper we illustrate the proposed concept by using the example of the policy mix for fostering the transition of the German energy system to renewable power generation technologies. Finally, we derive policy implications and suggest avenues for future research.