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Can green finance promote high-quality energy development? The case of China

Author

Listed:
  • Bo Wang
  • Kangyin Dong
  • Farhad Taghizadeh-Hesary

Abstract

Purpose - China is a significant energy consumer with increasingly severe resource constraints and environmental problems, requiring low-carbon energy transformation and encouraging high-quality energy development (HED). Green finance significantly affects the effect on HED as a cutting-edge financial strategy to support environmental improvement and encourage green development. Design/methodology/approach - Using panel data from 30 provinces from 2007 to 2019 and the system-generalized method of moments method, this paper investigates the impact of green finance on HED, and further explores their threshold effect, heterogeneous and asymmetry analysis. Findings - The main results indicate that: (1) green finance positively affects HED in China; in other words, a 1% increase in the green finance index will boost HED by an average of 0.767%; (2) as the economy improves, the positive impact of green finance on HED will be even more significant and (3) the contribution of green finance to HED is more significant in the northern provinces and areas with lower HED levels. Originality/value - This paper puts forward relevant policy suggestions to further improve the construction of the green financial system.

Suggested Citation

  • Bo Wang & Kangyin Dong & Farhad Taghizadeh-Hesary, 2023. "Can green finance promote high-quality energy development? The case of China," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 25(1), pages 64-79, November.
    • Handle: RePEc:eme:jrfpps:jrf-08-2023-0194
    DOI: 10.1108/JRF-08-2023-0194
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    Citations

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    Cited by:

    1. Skare, Marinko & Ozturk, Ilhan & Porada-Rochoń, Małgorzata & Stjepanovic, Sasa, 2024. "Energy as the new frontier: Dynamic panel data analysis revealing energy's transformative role in economic growth and technological progress," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    2. Chen, Zhuo & Mirza, Nawazish & Umar, Muhammad & Sawtari, Zeina & Xie, Xin, 2024. "Mineral resource investments and mutual funds performance: A remedy for recovery in BRICS," Resources Policy, Elsevier, vol. 91(C).

    More about this item

    Keywords

    High-quality energy development (HED); Green finance; Threshold effect; Asymmetry analysis; China; C23; L86; Q43; Q56;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • 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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