Abstract
In the context of common prosperity, it is of great significance to explore the influence and mechanism of financial development on the gap of green development. This study takes 250 prefecture‐level cities in China from 2003 to 2019 as the research object and empirically tests the influence of financial development on the gap of green development by using the super‐efficiency SBM model, the two‐way fixed effect model, and the mediating effect model. It is found that local financial effect can significantly narrow the gap of green development, while financial spillover effect of the central city can widen the gap of green development. The mechanism analysis shows that enhancing the advancement of human capital helps to optimize the utilization efficiency of financial resources outside the city and thus narrows the gap of green development. Local financial effect narrows the gap by the optimization of industrial structure, the improvement technological innovation, and the decrease of resource dependence, while financial spillover effect narrows the gap only by the optimization of industrial structure. The heterogeneity analysis demonstrates that local financial effect significantly narrows the gap of green development in cities that are 100–200 KM away from the central city in the central region, while financial spillover effect significantly enlarges the gap of green development in cities that are 100–300 KM away from the central city in the western region. The research in this paper facilitates the understanding of the influence of financial development on the gap of green development and puts forward relevant policy suggestions.
Highlights
Introduction and Literature ReviewWith more than 40 years of reform and opening up, China’s economy has progressed rapidly and become the second largest economy in the world. e economic growth rate has gradually changed from high growth in the past to stable development, and China’s economy has entered the “new normal” of economic development
Columns (1) and (2) of Table 3 shows the effect of financial level on green development. e estimated coefficient of local financial effect on green total factor production is positive and significant at the level of 5%. erefore, it can be considered that the advancement of the financial level contributes to the improvement of the green development level
Based on the data of Chinese cities, this study divides the financial function into local financial effect and spillover financial effect of the central city, empirically investigates the influence of China’s financial geography structure on the gap of green development and its mechanism, and discusses its heterogeneity, which provides empirical evidence for studying the influence of financial geography structure on the gap of green development. e main conclusions are as follows
Summary
With more than 40 years of reform and opening up, China’s economy has progressed rapidly and become the second largest economy in the world. e economic growth rate has gradually changed from high growth in the past to stable development, and China’s economy has entered the “new normal” of economic development. E Fifth Plenary Session of the 19th CPC Central Committee puts forward that green development should be regarded as an essential goal of the 14th Five-Year Plan and pointed out that China should pay close attention to the transformation of industrial structure and the high-quality economic development. Since green development requires the participation of financial elements, can the financial center built in China help to reduce the gap of regional green development? Can the spillover effect of the financial center in provincial capitals narrow the gap of green development in the province? From the perspective of geographical structure, this study discusses the influence of financial development in the central city and local cities on the gap of green development. This study finds that the advancement of human capital is its optimization mechanism, while the optimization of industrial institutions, the improvement technological innovation, and the decrease of resource dependence are its transmission mechanisms
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