Accelerating Green Growth: The Impact of Government Environmental Audits on Urban Green Economy

Xinyu Li, Bingrui Dong, Shujuan Li, Bangsheng Xie () and Luhua Xie ()
Additional contact information
Xinyu Li: School of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China
Bingrui Dong: School of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China
Shujuan Li: School of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China
Bangsheng Xie: School of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China
Luhua Xie: School of Economics and Management, Fujian Agriculture and Forestry University, Fuzhou 350002, China

Sustainability, 2025, vol. 17, issue 12, 1-26

Abstract: Green growth, as a universal objective in the pursuit of sustainable development, represents a critical pathway for harmonizing economic expansion with sustainability. Within this context, government environmental auditing emerges as a pivotal mechanism for advancing the modernization of national governance systems and enhancing regulatory capacity, thereby playing an indispensable role in accelerating green transformation. This study regards green economy as a proxy variable for green development. Using panel data of cities at prefecture level and above in China from 2012 to 2021, based on the performance audit of key energy-saving and environmental protection funds conducted by the National Audit Office in 18 provinces in 2017, adopts a quasi-natural experiment method, and uses the propensity score matching double difference method (PSM-DID) to examine the impact on green development. The findings indicate that such audits significantly enhance green economy levels in audited cities. This governance instrument fosters green innovation and facilitates industrial structural optimization, reinforcing its regulatory effectiveness. Furthermore, fiscal decentralization is found to moderate the relationship between environmental performance audits and urban green economic outcomes. Additional analysis reveals that the positive impact of government environmental auditing on green economy levels is more pronounced in cities characterized by lower fiscal transparency and stricter environmental regulations. By extending the research frontier of environmental auditing through the lens of fund performance evaluation, this study offers both theoretical insights and empirical evidence to support urban green development and promote sustainable economic transitions in both developing and developed economies.

Keywords: government environmental audits; green economy; fund audit; green innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/12/5289/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/12/5289/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:12:p:5289-:d:1674265

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().