Green finance, natural resources, and economic growth: Theory analysis and empirical research

Abstract

This study constructs a Hamilton optimization theory model and conducts empirical research using Chinese provincial panel data to analyze the relationship between green finance and economic growth. Our findings show that the green finance policy can help improve the scale and quality of economic growth, but at the expense of a reduced growth rate. Furthermore, green finance policy can guide capital flow to high-tech industries, which can promote the optimization and upgrading of the industrial structure. Innovation capital acts as a mediator in the transmission path of the “green finance and economic growth” mechanisms. Finally, the development of green finance helps weaken the dependence of economic growth on natural resources. Thus, green finance policy should be continuously improved and implemented to guide the green transformation of the financial sector and services to the real economy.