Abstract
The relationship between financial development and green economic growth has received much attention in recent years. Research on the relationship between financial development and green total factor productivity (GTFP) is of great importance to China and other countries. This study has attempted to reveal the spatial distribution of China’s provincial GTFP and impact of financial development on GTFP by using the method of GML index based on SBM-DDF and the spatial Durbin model (SDM) during the period 1996–2015. Innovation is added to the SDM to reflect the influencing mechanism of financial development on GTFP. The empirical results show the following: (1) The mean of China’s provincial GTFP showed a U-shaped curve in 1996–2015. (2) China’s provincial financial development promotes the growth of GTFP through innovation channel. The reason is that financial development boosts eco-friendly innovation and the introduction of energy saving technology, leading to a decrease in energy consumption and pollutant emissions. (3) Increasing the level of financial development in the surrounding areas will restrain local GTFP. Our results provide new evidence that China’s regional financial development has a spatial spillover effect. (4) China’s provincial GTFP has a significant spatial positive correlation. Finally, several policy implications can be summarized to China’s 30 provinces.
Highlights
China has experienced rapid economic growth in recent decades, coupled with the issue of high pollution and high emissions
Our results provide new evidence that financial development has a spatial spillover effect. e reason is that once a financial agglomeration zone is formed in the surrounding areas, it will inevitably produce a more significant competitive advantage, plunder the region’s economic resources and production factors, and weaken the ability of finance serving real economy in the neighboring areas [4]. e development of financial markets has brought together financial institutions in central cities, driving high-tech innovative industries of central cities, but transferring highenergy and high-pollution industries to surrounding areas
Research on the relationship between financial development and green total factor productivity (GTFP) is of great importance to China and other countries
Summary
China has experienced rapid economic growth in recent decades, coupled with the issue of high pollution and high emissions. The existing literature rarely considers environmental issues when discussing the relationship between financial development and economic growth. To the best of our knowledge, we infer that the spatial spillover effects of regional financial development will reduce GTFP in the neighboring areas. E main contributions of this study are as follows: first, the analysis of the impact of financial development on economic growth considering the quality of environment is in its infancy, and the research in this paper expands this field. E inferences made from this study may be helpful for policymakers in the financial center cities but may provide a clearer picture of 30 provinces in China and may assist in comprehending the scenario from a broader and more inclusive regional angle.
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