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Does green finance improve carbon emission efficiency? Experimental evidence from China

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Abstract

As a noteworthy initiative of financial supply-side reform to precisely support the green development system, can green finance (GF) help achieve the dual goals of “carbon peaking” and “carbon neutrality”? Using data from China’s provincial panel between 2007 and 2019, this paper measured the green finance index by the entropy method and the carbon emission efficiency (CEE) with carbon emission as the non-desired output by the Super-SBM model. Then, the influence of GF on CEE was empirically investigated by the dynamic panel model and the spatial Durbin model. The findings show that GF can significantly improve CEE and has a positive spillover impact on CEE in provinces with close economic ties; the upgrading of the industrial structure is a key mediator in the transmission of GF to CEE; and regional heterogeneity analysis finds that GF notably improves CEE in eastern, high development levels of economic and GF regions. The research can offer some theoretical and empirical references for green finance to contribute to low-carbon economic growth.

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Funding

This work received financial support from the National Natural Science Foundation of China (71463057), the Special Research Project on Science and Technology Innovation Strategy of **njiang Uygur Autonomous Region (2021B04001-4), the graduate research and innovation project of **njiang University (XJ2021G014, XJ2021G013, XJ2020G020), and the special project of the School of Business and Economics, Shanghai Business School “Research on the Impact of Digital Economy on High-Quality Economic Development” (SWJJ-GYZX-2021–06). The usual disclaimer applies.

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Authors and Affiliations

  1. School of Business and Economics, Shanghai Business School, Shanghai, 200235, China

    Qiying Ran

  2. Center for Innovation Management Research of **njiang, **njiang University, Urumqi, 830047, China

    Qiying Ran, Lu Liu, Yuxin Meng & **aodong Yang

  3. School of Economics and Management, **njiang University, Urumqi, 830047, China

    Lu Liu, Yuxin Meng & **aodong Yang

  4. Department of Business Administration, ILMA University, Karachi, Pakistan

    Asif Razzaq

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  1. Qiying Ran
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  2. Lu Liu
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  3. Asif Razzaq
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  4. Yuxin Meng
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  5. **aodong Yang
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Contributions

Lu Liu: conceptualization, project administration, writing—review and editing, and writing—original draft, software, visualization, formal analysis. Qiying Ran: writing—original draft, writing—review and editing, formal analysis, funding acquisition, and supervision. Yuxin Meng: formal analysis, methodology, data curation, writing—review and editing, and validation. **aodong Yang: writing—review and editing. Asif Razzaq: writing—review and editing and validation.

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Correspondence to Lu Liu.

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Ran, Q., Liu, L., Razzaq, A. et al. Does green finance improve carbon emission efficiency? Experimental evidence from China. Environ Sci Pollut Res 30, 48288–48299 (2023). https://doi.org/10.1007/s11356-023-25571-y

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