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How does green finance affect green total factor productivity? Evidence from China

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  • Lee, Chi-Chuan
  • Lee, Chien-Chiang

Abstract

While the literature has studied various factors affecting green productivity growth, there is a relative dearth of empirical studies quantitatively analyzing the linkage between green finance development and green productivity. Based on a comprehensive index of green finance development, this research thus employs panel data of 30 China's provinces for the period 2006–2018 to explore the influence of green finance on green total factor productivity, revealing estimation results that green finance development significantly improves the level of green productivity. This beneficial effect tends to be stronger in provinces with higher levels of economic and social conditions, less public participation in environmental protection, and high pollution levels. We also find that implementing a green finance policy can further enhance the impact of green finance development. The empirical results herein offer policy implications to China's green finance planning and environmental policy.

Suggested Citation

  • Lee, Chi-Chuan & Lee, Chien-Chiang, 2022. "How does green finance affect green total factor productivity? Evidence from China," Energy Economics, Elsevier, vol. 107(C).
    • Handle: RePEc:eee:eneeco:v:107:y:2022:i:c:s0140988322000469
    DOI: 10.1016/j.eneco.2022.105863
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    More about this item

    Keywords

    Green finance; Green total factor productivity; Green economy; Environmental policy; China;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • 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

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