Coordinated development between green finance and environmental performance in China: The spatial-temporal difference and driving factors

Abstract

The coordination relationship and the balance of development between green finance and environmental performance are crucial to guaranteeing sustainable development under circumstances of economic transition. The current paper demonstrates the construction of index systems pertaining to green finance and environmental performance. Based on a panel dataset of 30 Chinese provinces from 2008 to 2019, the coupling coordination degree model, spatial autocorrelation model, and spatial panel model are used to analyze the spatial-temporal characteristics and driving factors of the coordinated development of green finance and environmental performance across the country. The results show that, first, an overall upward trend in the green finance index appeared, with most high-value areas located in the eastern regions. In terms of environmental performance, the number of provinces with efficient environmental performance values rose from 3 to 17. These provinces were mainly distributed in the eastern and central regions. Second, the coupled coordination of green finance and environmental performance rose from mild incoordination to primary coordination during the study period, with marked spatial autocorrelation and a downward trend from east to west. Finally, industrial structure, economic development level, and environmental regulations were found to positively impact the coordinated development of green finance and environmental performance, while population density exerted an inhibiting effect on it. These effects differ across regions. The paper concludes with several policy implications, offered to guide the coordinated development of green finance and environmental performance.