Green financial policy, environmental regulation, and energy use efficiency

Zhuoya Ren, Yuan Bo and Yuanye Lei

Finance Research Letters, 2025, vol. 74, issue C

Abstract: This study analyzes 280 cities at or above the prefecture level from 2010 to 2021, employing a difference-in-differences model to assess the impact of the green finance reform and innovation pilot zones on urban green total factor energy efficiency. The findings indicate green finance reform and innovation pilot zones significantly enhance urban green total factor energy efficiency, with environmental regulation serving as a positive moderating factor, which is validated using a series of robustness checks. The heterogeneity analysis reveals that the pilot policy has a more pronounced effect on improving green total factor energy efficiency in cities located in the eastern region. This study addresses the critical question of whether the green finance pilot policy can boost urban green total factor energy efficiency, providing empirical evidence and policy recommendations for China's green finance reforms to promote sustainable urban development. Furthermore, the results demonstrate the role of environmental regulation in amplifying the effects of green finance policies, offering valuable insights for further optimizing the design of such policies.

Keywords: Difference-in-difference; Pilot zones for green finance reform and innovation; Environmental regulation; Green total factor energy efficiency (search for similar items in EconPapers)
JEL-codes: G18 Q56 Q58 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:74:y:2025:i:c:s1544612324017409

DOI: 10.1016/j.frl.2024.106711

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