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Does financial development promote high-quality economic development goals of China? Novel findings and implications from technological innovation perspective

Author

Listed:
  • Zhengyuan Liu

    (Assumption University of Thailand)

  • Yi Shi

    (Zhejiang University)

  • Hongxi Chen

    (Ulaanbaatar Erdem University
    Quanzhou Yixing Electrical Engineering Construction Co., Ltd., Nan’an Branch)

  • Guochao Lin

    (Fuzhou University of International Studies and Trade)

  • Huangxin Chen

    (Macao Polytechnic University)

Abstract

China is dedicated to advancing high-quality economic development (HED) in alignment with the United Nations’ Sustainable Development Goals (SDGs), focusing on ecological civilization and social welfare. Financial support is crucial for sustainable and rapid economic growth. This study utilizes panel data from 30 provinces and municipalities in China to examine the impact of financial development on HED, particularly in relation to scientific and technological innovation (STI). The study utilizes a threshold regression model. The findings assert that development of finance significantly contributes to HED of China. Among the categorical indicators of development of finance, efficiency of financial development yields the most pronounced impact, followed by structure of financial development, while financial development scale exerts the least influence. Augmenting the caliber of STI magnifies the contribution of financial development and its categorical indicators to HED. However, as the STI level improves further, financial development's overall role in promoting HED diminishes. In order to realize high-quality development, enhancing the efficiency of financial development is crucial, optimize its structure, and promote effective collaboration between financial development and STI. The government should leverage the active role of finance in eco-environmental governance and technological innovation.

Suggested Citation

  • Zhengyuan Liu & Yi Shi & Hongxi Chen & Guochao Lin & Huangxin Chen, 2025. "Does financial development promote high-quality economic development goals of China? Novel findings and implications from technological innovation perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(2), pages 4469-4488, February.
    • Handle: RePEc:spr:endesu:v:27:y:2025:i:2:d:10.1007_s10668-023-04085-0
    DOI: 10.1007/s10668-023-04085-0
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