North–South Differences and Formation Mechanisms of Green Finance in Chinese Cities

Abstract

This paper discusses the north–south difference in green finance in China and its internal mechanism. The entropy method is used to measure the green finance level in China from 2000 to 2022 through seven dimensions of green credit, green investment, green insurance, green support, green bonds, green funds, and green equity. The Dagum Gini coefficient and variance decomposition are used to reveal the differences and sources from the perspectives of north–south space and structure. The QAP method is utilized to explore formation mechanisms of differences. Research findings show that the overall level of green finance is not high, with the southern level higher than northern one. However, spatial differences in the green finance index have slightly narrowed, with regional differences being the major contributor to uneven distribution. Secondly, the difference in green funds is the main structural source of the difference in green finance, and the effect of the difference in green bonds and green funds on the difference in green finance increases from north to south, while the effect of the difference in green credit and green support decreases from north to south. This study will enrich the assessment indicator system, providing a reference for green finance differential situations and collaborative development strategies.