Exploring the effect of green finance on green development of China’s energy-intensive industry—A spatial econometric analysis

Abstract

An indispensable part of the green revolution is the green development of the Energy-intensive Industry (EII), which is crucial for China to achieve its “double carbon” target. EII is one of the key sectors bound by the green finance policy, whose development level is susceptible to regional conditions. Therefore, this research constructs a spatial Durbin model using provincial panel data (2001-2019) to empirically examine the impact of green finance on EII’s green total factor productivity (GTFP). Evidence shows that green finance boosts EII’s GTFP significantly and there is a spatial spillover effect. Specifically, the results demonstrate the spatial spillover effect’s regional heterogeneity which in contrast to the western region, is positive in the eastern, central and northeastern regions. Furthermore, there is a spatial inhibitory effect on two subindustries of EII, i.e., Manufacture of Non-metallic Mineral Products industry and Smelting and Pressing of Non-ferrous Metals industry, proving the spatial spillover effect’s sectoral heterogeneity for green finance. This research provides experimental evidence and policy suggestions for enhancing the promotion impact of green finance on EII’s GTFP.