Allocation of Financial Resources and Green Economic Development: Evidence from China

Leilei Liu (), Yao Tang and Xiaowei Luo
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Leilei Liu: School of Economics and Management, Northwest University, Xi’an 710127, China
Yao Tang: School of Economics and Management, Northwest University, Xi’an 710127, China
Xiaowei Luo: Shaanxi Branch of the People’s Bank of China, Xi’an 710001, China

Sustainability, 2024, vol. 16, issue 17, 1-15

Abstract: Green development has recently become the theme of global economic development. Focusing on green development, this paper uses China’s interprovincial panel data from 2003–2022 to construct a spatial Durbin model to study the impact of the allocation of financial resources between the virtual economy and the real economy on green development. The findings are as follows: (1) The “virtual and real” allocation of financial resources has a significant effect on the green development of the economy; on the whole, the increase in financial resources in the virtual economy reduces the quality of green economic development. (2) The “virtual and real” allocation of financial resources has an obvious spatial spillover effect on green economic development; the increase in financial resources flowing into the virtual economy in one province (city) reduces the proportion of financial resources flowing into the virtual economy in neighboring provinces, which is conducive to the green economic development of the neighboring provinces. (3) Due to the differences in economic structure, industrial structure, and financial development level among provinces and regions, the “virtual and real” allocation of financial resources has a significant effect on the green economic development of central, eastern, and western China.

Keywords: financial resource allocation; green development; spatial spillover effect (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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