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Impact of green finance on low-carbon transformation: Spatial spillover effects in China

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  • Zhao, Jing

Abstract

This study developed a green financial indicator system based on a Principal Component Analysis (PCA) approach to investigate the impacts of green finance on carbon emissions by using the panel data from 30 Chinese provinces and municipalities from 2014 to 2021. The key findings conclude that green investments and debts are effective at reducing emissions, while green equity has a limited impact. Empirical results demonstrate that green finance enhances innovation efficiency, which in turn facilitates reductions in emissions. Additionally, the Spatial Durbin Model indicates significant spatial spillover effects, with progress in one province benefiting neighboring areas. The policy implications of the study suggest that enhancing green equity and adapting finance strategies to regional conditions could significantly advance the carbon reduction objectives for China.

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  • Zhao, Jing, 2024. "Impact of green finance on low-carbon transformation: Spatial spillover effects in China," The North American Journal of Economics and Finance, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:ecofin:v:74:y:2024:i:c:s106294082400127x
    DOI: 10.1016/j.najef.2024.102202
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    1. Jiyou Xiang & Linfang Tan & Da Gao, 2024. "Unlocking Green Patterns: The Local and Spatial Impacts of Green Finance on Urban Green Total Factor Productivity," Sustainability, MDPI, vol. 16(18), pages 1-17, September.

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    More about this item

    Keywords

    Green Finance; Carbon Emission Reduction; Pilot Carbon Trading Policies; Principal Component Analysis; Spatial Econometrics;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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