The impact of green finance policy on land ecological security: City-level evidence from China

Abstract

As the phenomenon of ecological degradation increases, there is a growing body of research related to green finance, but no papers evaluating the link between it and land ecological security. Thus, this research calculates land ecological security using data from 158 cities in China's major grain-producing regions from 2012 to 2020. Taking China's green finance policy as an example, it applies the synthetic difference-in-difference method to analyze green finance's impact on land ecological security. The conclusions show that, first, green financial policy implementation has contributed to the improvement of land ecological security by 0.154 units. This result still holds after a series of robustness tests such as parallel trend tests, dynamic effects tests, and placebo tests. Second, mechanism analysis finds that green finance affects land ecological security through three paths: agricultural scale management, agricultural technological progress, and eco-industrialization. Third, in terms of the sub-dimension of eco-industrialization, green finance promotes domestic tourism revenues, agriculture, forestry, and animal husbandry, while its impact on international tourism revenues and fisheries is not significant. The results herein confirm the role of green finance in securing ecological security of land. Future research will further enrich the indicator system of land ecological security as well as excavate the boundary conditions for green finance in order to promote land ecological security.