Evaluation and Empirical Research on Eco-Efficiency of Financial Industry Based on Carbon Footprint in China

Xiaolan Chen, Kaikai Wang, Guanjiang Wan, Yufei Liu, Wenbin Liu, Wanfang Shen () and Jianing Shi
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Xiaolan Chen: Shandong Province Social Governance Intelligent Technology Innovation Center, Shandong University of Finance and Economics, Jinan 250014, China
Kaikai Wang: School of Statistics and Mathematics, Shandong University of Finance and Economics, Jinan 250014, China
Guanjiang Wan: Kent Business School, University of Kent, Canterbury CT2 7NZ, UK
Yufei Liu: School of Statistics and Mathematics, Shandong University of Finance and Economics, Jinan 250014, China
Wenbin Liu: Faculty of Business and Management, Beijing Normal University—Hong Kong Baptist University United International College, Zhuhai 519087, China
Wanfang Shen: Shandong Key Laboratory of Blockchain Finance, Shandong University of Finance and Economics, Jinan 250014, China
Jianing Shi: School of Statistics and Mathematics, Shandong University of Finance and Economics, Jinan 250014, China

Sustainability, 2022, vol. 14, issue 20, 1-20

Abstract: Since finance is the core of economic development, the green development of the financial industry is an essential driving force not only for achieving the dual “carbon” goal of China but also for economic and social sustainable development. An accurate understanding of the ecological efficiency of the financial industry is of great importance for guiding sustainable economic development. In this paper, we first calculate the carbon footprint of China’s financial industry in 2012 and 2017 based on the life cycle theory and the input–output analysis method. Second, we analyze the primary sources and final flows of the carbon footprint of the financial industry in each province from the perspectives of the industrial chain and final demand. Finally, we estimate the ecological efficiency, emission reduction, and value-added potential of the financial industry by using the radially adjusted slack variable DEA model (SRAM-DEA) under two assumptions, natural disposability and managerial disposability. The results show that (1) the ecological efficiency of the financial industry in most provinces is low, and the regional differences are significant; (2) the overall ecological efficiency of the financial industry in 2017 was better than that in 2012; (3) technological innovation of financial products and the upgrading of capital supervision play an essential role in promoting the improvement of ecological efficiency. Especially, under managerial disposability, the ecological efficiency of the financial industry in each province has a greater potential for emission reduction and added value.

Keywords: green finance; carbon footprint; ecological efficiency; SRAM-DEA model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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