 Can banking competitiveness stimulate the development of regional green finance?Weiming Xiang and Chen Ma International Review of Economics & Finance, 2025, vol. 103, issue C Abstract: This study examines the impact of competition among commercial banks on the advancement of regional green finance, utilizing data from 276 Chinese cities (2007–2023) and the Herfindahl-Hirschman Index (HHI) as a metric for competition. Employing a two-way fixed effects model and stringent robustness tests, we ascertain that reduced banking concentration (more competition) substantially enhances the expansion of green finance. This effect functions through two primary mechanisms: competitive pressure augments banks' credit capacities (through enhanced green project evaluation and customized products) and draws in green firms (by lowering entry barriers). The impact is particularly pronounced in less financially developed areas (mid-western China, southeast of the Hu Huanyong Line), where competition mitigates structural finance deficiencies. These findings highlight the significance of competitive banking as a driver of green finance, providing practical guidance to governments and banks seeking to expedite sustainable economic changes. Keywords: Banking competitiveness; Green finance development; Credit capacity; Firms' entry (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006276 DOI: 10.1016/j.iref.2025.104464 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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