Carbon-Reduction, Green Finance, and High-Quality Economic Development: A Case of China

Shaolong Zeng, Qinyi Fu (), Fazli Haleem, Yang Shen and Jiedong Zhang
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Shaolong Zeng: School of Economics, Hangzhou Normal University, Hangzhou 311121, China
Qinyi Fu: School of Economics, Hangzhou Normal University, Hangzhou 311121, China
Fazli Haleem: Department of Management Sciences, Shaheed Benazir Bhutto University, Sheringal 18200, Pakistan
Yang Shen: School of Economics, Hangzhou Normal University, Hangzhou 311121, China
Jiedong Zhang: Hangzhou Economist Association, Hangzhou 311121, China

Sustainability, 2023, vol. 15, issue 18, 1-22

Abstract: Development that is eco-friendly, coordinated, sustainable, and of the highest caliber is crucial to China’s modernization. Based on the Cobb–Douglas production function and environmental Kuznets curve analysis, this paper investigates the link between green finance and the reduction of carbon emissions and high-quality economic development, then puts forward the hypothesis that green finance promotes high-quality economic development, and carbon emission reduction effect is its important transmission mechanism. This paper applies the bidirectional fixed effect model to a panel dataset of 30 Chinese provinces, cities, and autonomous regions from 2008 to 2019 to conduct an empirical test. The empirical results show that: (1) Green finance has a significant role in promoting high-quality economic development, which has passed the robustness test and has regional heterogeneity. (2) The growth of green financing reduces carbon emissions, which encourages high-quality development. (3) A positive spatial spillover effect results from the promotion of green finance to high-quality economic development. Given the aforementioned findings, this paper makes policy recommendations regarding how green financing, carbon emission reduction, and high-quality economic development might work together to support green development.

Keywords: green finance; high-quality development; carbon reduction; influence; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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