Analysis of the Threshold Effect of Financial Development on China’s Carbon Intensity

Xiongfeng Pan, Yaobo Yan, Xiaoxue Peng and Qing Liu
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Xiongfeng Pan: Faculty of Management and Economics, Dalian University of Technology, Dalian 116023, China
Yaobo Yan: Faculty of Management and Economics, Dalian University of Technology, Dalian 116023, China
Xiaoxue Peng: Faculty of Management and Economics, Dalian University of Technology, Dalian 116023, China
Qing Liu: Faculty of Management and Economics, Dalian University of Technology, Dalian 116023, China

Sustainability, 2016, vol. 8, issue 3, 1-14

Abstract: Using panel data on 30 provinces in China from 2005 to 2012, this paper conducts an empirical test on the threshold effect of the relationship between financial development and carbon emission intensity from the perspectives of financial scale and financial efficiency. The results show that at a low level of per capita GDP, the expansion of the financial scale and the enhancement of financial efficiency will increase carbon intensity. When the per capita GDP is greater than the threshold value (RMB 37,410), the expansion of the financial scale will also increase carbon intensity, but the potency of this effect will be weaker. At the same time, the improvement of financial efficiency will help reduce carbon intensity. Most provinces with per capita GDP greater than the threshold value (RMB 37,410) are located in the eastern coastal areas of China, whereas most provinces with per capita GDP less than the threshold value are located in the central and western areas of China. Both raising the level of openness and improving the industrial structure will have significantly positive effects on carbon intensity.

Keywords: carbon intensity; financial scale; financial efficiency; threshold effect (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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