Green finance, new infrastructure, and carbon emission performance in Chinese cities

Abstract

Green finance (GF), new infrastructure (NI), and low-carbon green development play important roles in promoting high-quality economic development in China. To date, few studies have considered the relationships among GF, NI, and carbon emission performance (CEP) simultaneously. Using the panel data of 285 Chinese cities from 2011 to 2021, an improved vertical and horizontal pull-out gearing method was used to measure the GF and NI composite indices, and the CEP was measured using the slacks-based measure (SBM) non-expected output model. Using the panel data fixed-effects model and interactive effect model, it was found that both GF and NI can effectively enhance urban CEP and produce a superposition effect, promoting each other to deepen their ability to enhance the CEP. Heterogeneity analysis showed that the effects of GF and NI are more notable in eastern China, with a higher degree of marketization, policy support for the development of the digital economy, and resource-based cities. Green technological innovation, industrial structure upgrading, and resource allocation optimization are pathways for GF and NI to jointly enhance the CEP. Further analysis of the spatial system of the equation model using the generalized three-stage least squares (GS3SLS) methodology found that there were spatial interaction spillover effects among GF, NI, and CEP and that these effects were better for a local area than for the surrounding neighboring cities.