Green Finance Advancement and Its Impact on Urban Haze Pollution in China: Evidence from 283 Cities

Abstract

This study selects the entropy method to measure the comprehensive index of green finance and 2011–2020 panel data covering 283 cities in China; describes spatial and temporal evolution, the migration of the centre of gravity, and discrete trends in green finance and urban haze pollution; and empirically examines the effect of green finance on urban haze pollution using static and dynamic spatial Durbin models. The study revealed that Chinese urban haze pollution significantly decreased during the sample period and that the hotspot emission area shifted to the northeast. Green finance experienced significant advancement, transitioning from a lower stage to a higher stage and becoming more geographically focused. Green finance mainly suppresses urban haze pollution through spatial spillover effects, and such spatial spillover effects change from positive to negative over time. Regarding regional heterogeneity, the effect on the western region is positive, the effects on the central and eastern regions are negative, and there is a spatial spillover effect “from promotion to inhibition” in the eastern region. Due to the heterogeneity in resource endowments, green finance in nonresource-based cities has a greater impact on haze pollution than does green finance in other cities, and in the long term, it has a significant inhibitory effect on haze pollution. This study reveals the effect of green finance on urban haze pollution from a dynamic perspective and, in doing so, it not only provides a new path for joint governance of haze pollution between cities but also provides more accurate guidance for the government to formulate policies for different regions and regions with different resource endowments.