The Impact of Financial Development on Pollution Reduction Evidence from Provinces in China

Weizhuojia Peng, Weibai Liu and Yijia Li

Technological Forecasting and Social Change, 2025, vol. 212, issue C

Abstract: This paper examines the impact of financial development on pollution reduction at the enterprise level using statistical data from 30 provinces in China from the period 2018 to 2022. The effect of financial development on pollution reduction is examined separately from the perspectives of scale effect and technology effect. Although there are significant regional differences in the impact of the increased use of financial instruments on pollution reduction in different provinces of China, on balance the greater use of financial tools decreases pollution, reflecting the technological effect of utilizing financial tools exceeds the scale effect. Heterogeneity analysis shows that the impact of financial development on pollution reduction of private enterprises is higher than that of state-owned enterprises. The paper also discusses the implications for China in achieving carbon peak and carbon neutrality and promoting high-quality economic development and an economic green transformation. Since improvement in the financial system is a key to improving the environment, the increased efficiency of financial tools enhances this improvement.

Keywords: Pollution reduction; financial development; Scale effect; Technology effect; Chinese provinces (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0040162524007248
Full text for ScienceDirect subscribers only

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:eee:tefoso:v:212:y:2025:i:c:s0040162524007248

DOI: 10.1016/j.techfore.2024.123926

Access Statistics for this article

Technological Forecasting and Social Change is currently edited by Fred Phillips

More articles in Technological Forecasting and Social Change from Elsevier
Bibliographic data for series maintained by Catherine Liu ().