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Nexus between Green Finance and Renewable Energy Development in China

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  • Mingbo Zheng
  • Qiang Du
  • Quan-Jing Wang

Abstract

Renewable energy development is essential to energy structure transition and environmental emission reduction, and promoting renewable energy development via green financial instruments has been an effective approach to attain the objective of carbon neutrality in China. This research explores the bi-directional cointegration relationship between green finance and renewable energy development by adopting provincial data of China from 2005 to 2018. Results indicate a long-run bi-directional comovement exist between green finance and renewable energy development. This cointegration relationship appears in the eastern and central provinces of China, but is absent for western provinces. The pooled mean group estimators show that green finance cannot promote renewable energy development in the short run, whereas it does so in the long run for both the eastern and central provinces. Our research presents implications for emerging economies to initiate and design green financial instruments and renewable energy measures.

Suggested Citation

  • Mingbo Zheng & Qiang Du & Quan-Jing Wang, 2023. "Nexus between Green Finance and Renewable Energy Development in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(4), pages 1205-1218, March.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:4:p:1205-1218
    DOI: 10.1080/1540496X.2022.2119811
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    Cited by:

    1. Wang, Hai-Jie & Zheng, Mei-Qi & Yin, Hua-Tang & Chang, Chun-Ping, 2024. "Green innovation, industrial structure and urban eco-efficiency in Chinese cities," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1011-1024.
    2. Chen, Mo & Xue, Wei-Xian & Zhao, Xin-Xin & Chang, Chun-Ping & Liu, Xiaoxia, 2024. "The impact of economic sanctions on the COVID-19 pandemic," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 163-174.
    3. Niu, Bingcheng, 2024. "Government environmental protection expenditure and national ESG performance: Global evidence," Innovation and Green Development, Elsevier, vol. 3(2).
    4. Ma, Yu & Wang, Yutian & Zhou, Xiangjun, 2024. "The impact of green finance on the development of the non-hydro renewable energy industry: An empirical study based on data from 30 provinces in China," Renewable Energy, Elsevier, vol. 227(C).
    5. Liu, Yutong & Zheng, Mingbo & Shum, Wai Yan, 2024. "On the linkages between digital finance and real economy in China: A cointegration analysis," Innovation and Green Development, Elsevier, vol. 3(1).
    6. Li, Yangfan & Zhang, Xiaoyun, 2023. "Recycling scheme of carbon pricing for inclusive decarbonization and energy transition: A recursive computable general equilibrium analysis in China," Renewable Energy, Elsevier, vol. 217(C).
    7. Long, Han & Prasad, Biman & Krishna, Victor & Tang, Kai & Chang, Chun-Ping, 2024. "Understanding the key determinants of Fiji's renewable energy," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1144-1157.
    8. Zheng, Mingbo & Wong, Chun Yee, 2024. "The impact of digital economy on renewable energy development in China," Innovation and Green Development, Elsevier, vol. 3(1).
    9. Sui, Bo & Sharma, Susan Sunila & Yao, Liu-Yang & Ni, Guo-Hua & Chang, Chun-Ping, 2024. "Does aging affect renewable energy? The role of extreme events and economic development," Energy Economics, Elsevier, vol. 133(C).
    10. Lin, Ying & Yin, Hua-Tang & Wen, Jun & Chang, Chun-Ping, 2024. "Assessing the impact of religion on environmental quality," Economic Systems, Elsevier, vol. 48(1).
    11. Xue, Yan & Hu, Dongmei & Irfan, Muhammad & Wu, Haitao & Hao, Yu, 2023. "Natural resources policy making through finance? The role of green finance on energy resources poverty," Resources Policy, Elsevier, vol. 85(PA).
    12. Yinuo Wang & Fengxiu Zhou & Huwei Wen, 2023. "Does Environmental Decentralization Promote Renewable Energy Development? A Local Government Competition Perspective," Sustainability, MDPI, vol. 15(14), pages 1-18, July.
    13. Zhang, Jinlong & Wu, Mingyue & Chen, Tingwei & Gao, Bin, 2024. "Green credit, financing constraints, and corporate investment: From the perspectives of scale and efficiency," The North American Journal of Economics and Finance, Elsevier, vol. 73(C).
    14. Chen, Di & Hu, Haiqing & Wang, Ning & Chang, Chun-Ping, 2024. "The impact of green finance on transformation to green energy: Evidence from industrial enterprises in China," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    15. Niu, Peng & Sun, Kun & Sun, Lirong & Chang, Chao-Wen, 2024. "The political economy and green innovation: A scientometric analysis," Innovation and Green Development, Elsevier, vol. 3(2).
    16. Wang, Mingsen & Zhong, Daojun & Ali, Sajid & Meo, Muhammad Saeed, 2024. "The windfall of green finance: Advancing environmental sustainability through wind energy," Renewable Energy, Elsevier, vol. 227(C).
    17. Lee, Chien-Chiang & He, Zhi-Wen & Yuan, Zihao, 2023. "A pathway to sustainable development: Digitization and green productivity," Energy Economics, Elsevier, vol. 124(C).

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