Can financial agglomeration curb carbon emissions reduction from agricultural sector in China? Analyzing the role of industrial structure and digital finance

Abstract

As China enters the process of agricultural modernization, the problem of carbon emissions from agricultural sectors has become increasingly prominent, and the government and academia urgently need to take action. In this context, this study extends the literature through a new perspective of China's financial agglomeration construction that examines the actual role of financial agglomeration on agricultural carbon emissions reduction by using two-way fixed effect model and threshold effect model based on the panel data of 30 provinces in China from 2011 to 2019. Data statistics show that China has formed a multi-center development pattern with Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macao as highly financial agglomeration under the influence of different locations, factor endowments and development foundations. Further empirical model estimates reveal the following main findings. Firstly, the effects of financial agglomeration on total agricultural carbon intensity (TACI), agricultural greenhouse gas carbon intensity (AGCI), agricultural energy carbon emission intensity (AECI), and agricultural input factors carbon intensity (ASCI) show an inverted U-shaped curve that from irritating to inhibiting. That is, financial agglomeration is conducive to slowing down agricultural carbon emissions. Secondly, financial agglomeration has a significant inhibitory effect on TACI, AGCI, AECI and ASCI in Beijing and Shanghai. Thirdly, when the industrial structure is more reasonable or the digital finance is more developed, the effect of financial agglomeration on reducing agricultural carbon emissions is stronger. Based on the current research results, promoting the construction of financial agglomeration is an effective way to promote agricultural carbon emissions reduction, and it is suggested that the government design effective systems and policies to slow down the carbon emissions in the agricultural sector.