How do financial spatial structure and economic agglomeration affect carbon emission intensity? Theory extension and evidence from China

Bin Yan, Feng Wang, Mingru Dong, Jing Ren, Juan Liu and Jing Shan

Economic Modelling, 2022, vol. 108, issue C

Abstract: This study investigates the mechanism of a financial spatial structure and economic agglomeration on carbon emission intensity by combining a reconstructed financial spatial structure indicator that integrates spatiality, industrial affiliation, and competition with a theoretical model of financial spatial structure and economic agglomeration impacts on carbon emission intensity under increasing returns to scale assumption. We employ a dynamic spatial Durbin panel model with data from provinces in China during 2005–2017 to validate the theoretical mechanism. The results indicate that both short- and long-term financial spatial structures can mitigate carbon emission intensity, thereby demonstrating spatial and temporal lock-in effects. However, economic agglomeration and energy intensity promote carbon emission intensity with only temporal lock-in effects. Moreover, the financial spatial structure tends to have a smaller but more far-ranging, long-term impact. The analysis implies that promoting financial spatial restructuring through strategic credit allocation, industrial linkage, and competition and mitigating economic agglomeration are crucial to expedite the process of “carbon peak and neutrality.”

Keywords: Carbon emission intensity; Financial spatial structure; Economic agglomeration; Dynamic spatial durbin model (search for similar items in EconPapers)
JEL-codes: C31 F12 R12 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:108:y:2022:i:c:s0264999321003345

DOI: 10.1016/j.econmod.2021.105745

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