Green Finance Lens: How Sustainable Finance Boosts Energy Efficiency

Jun Yin, Simin Lyu and Maozheng Fu

Politická ekonomie, vol. preprint

Abstract: This study investigates the relationship between green finance and energy efficiency using panel data from 276 Chinese prefecture-level cities over the period 2006-2021. Employing a two-way fixed effects model and robustness checks including Tobit regression, propensity score matching, and lagged dependent variable approaches, we find that green finance significantly enhances energy efficiency. The positive effect is particularly pronounced in cities with higher levels of financial development. Mechanism analysis reveals that green finance promotes energy efficiency primarily through two channels: increasing market openness and accelerating industrial structure upgrading. Based on these findings, we recommend strengthening institutional support for green finance, leveraging regional financial advantages, deepening market reforms, and promoting industrial transformation to enhance energy efficiency and support sustainable development goals.

Keywords: Green finance; energy efficiency; market openness; industrial structure (search for similar items in EconPapers)
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DOI: 10.18267/j.polek.1547

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