Does Green Finance Improve Industrial Energy Efficiency? Empirical Evidence from China

Linmei Cai and Jinsuo Zhang ()
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Linmei Cai: College of Energy Engineering, Xi’an University of Science and Technology, Xi’an 710054, China
Jinsuo Zhang: School of Economics and Management, Yan’an University, Yan’an 716000, China

Energies, 2024, vol. 17, issue 19, 1-25

Abstract: Improving industrial energy efficiency (IEE) is crucial for reducing CO 2 emissions. Green finance (GF) provides an essential economic instrument for investment in IEE improvement. However, previous studies have not reached a consensus on whether GF can promote energy efficiency. In addition, more research is needed in the industrial sector. Therefore, this study focused on the industrial level to investigate GF’s impact on IEE and its heterogeneity using a two-way fixed effects model. The moderating effect, threshold effect, and spatial lag models were used to test the various effects of GF on IEE. In addition, the spatial clustering characteristics of IEE were analyzed. The results indicate the following: GF can significantly promote IEE, positively improves IEE in the central and eastern areas, and has a negative impact in the western area; the marketization level (ML) is an important channel through which GF can further improve IEE; GF’s impact on IEE exhibits a single threshold effect of the level of economic development (EDL) and green credit (GCL); GF promotes local IEE improvement but prevents neighboring IEE improvement; and IEE shows four types of clusters, but only in about one-third of the provinces. Based on these results, several recommendations are provided.

Keywords: industry; green finance; industrial energy efficiency; the marketization level (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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