The Impact of Financial Deepening on Carbon Reductions in China: Evidence from City- and Enterprise-Level Data

Kai Tang (), Qianbo Chen, Weijie Tan and Yi Jun Wu Feng
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Kai Tang: School of Economics and Trade, Guangdong University of Foreign Studies, Guangzhou 510006, China
Qianbo Chen: School of Economics and Trade, Guangdong University of Foreign Studies, Guangzhou 510006, China
Weijie Tan: School of Economics and Trade, Guangdong University of Foreign Studies, Guangzhou 510006, China
Yi Jun Wu Feng: School of Economics and Trade, Guangdong University of Foreign Studies, Guangzhou 510006, China

IJERPH, 2022, vol. 19, issue 18, 1-15

Abstract: This study extends the limited evidence of the China context by establishing a panel fixed-effect model to identify the nexus between financial deepening and carbon emissions. Using newly compiled city-level (287 prefecture-level and above cities) and enterprise-level (resource enterprises listed on the Chinese A-shares) datasets from 2007 to 2019, this study quantitatively evaluated finance deepening and analysed the impact of financial deepening on carbon emissions in China, with a particular consideration of green innovation. Our results document that financial deepening contributes to carbon reductions, as shown by the considerably decreased carbon dioxide (CO 2 ) emissions. Both the city-level and enterprise-level estimates argue that financial deepening has a promoting effect on green innovation. Stimulating green innovation is identified as an important mechanism through which financial deepening can contribute to carbon reductions. Policy implications are presented based on the empirical results.

Keywords: financial deepening; carbon emissions; green innovation; China (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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