Abstract
Finance contributes to poverty alleviation through economic growth, and the development of green finance is related to the sustainable development of the world economy and environment. Green finance not only helps promote sustainable economic development but also helps reduce poverty. Based on the analysis of related theories about green finance and poverty alleviation, this paper selects 18 indicators from three dimensions of economic development, financial development, and social environmental development and uses the improved entropy method to measure the green finance development index of China’s 25 provinces and municipalities from 2004 to 2017. The results show that the development level of green finance in China’s 25 provinces and municipalities is quite different. On the basis of the above analysis, make an empirical analysis of the impact of the green finance development index on poverty alleviation using multiple regression analysis and static panel and dynamic panel estimation methods. The research results show that there is a significant positive correlation between green finance and poverty alleviation; the higher the level of green finance development, the more conducive the poverty alleviation. So, this paper suggests that poverty can be better alleviated by improving the level of green finance development, financial asset level, and economic development level.
Highlights
Finance contributes to poverty alleviation through economic growth, and the development of green finance is related to the sustainable development of the world economy and environment
We find that there is very little literature analyzing the relationship between green finance development and poverty alleviation, but more research studies examine that financial development does matter on poverty alleviation
For the dimension of economic development, this paper considers three indicators: GDP per capita, income per capita, and unemployment rate. e higher GDP per capita is, the greater local economic development is, and the more strongly green finance is promoted. erefore, GDP per capita is a positive indicator of the green finance development index. e higher income per capita is, the higher overall income is, and the more environmental protection is emphasized. erefore, income per capita is a positive indicator of green finance. e higher the unemployment rate, the lower the development of green finance. erefore, the unemployment rate is a negative indicator of green finance
Summary
Influence of GFI on Poverty Alleviation according to Linear Regression. We first use a simple multivariate linear regression method to study the effect of the China’s GFI on poverty alleviation. E model is built as follows: Yi α + β1GFIi + β2CPIi + β3LROADi. Influence of GFI on Poverty Alleviation according to Panel Regression. Static and dynamic panel regression models are employed. Where Yit−1 is the first-order lag of the explained variable and Zit is the explanatory variable. Erefore, dynamic panel models must be used to study the dynamic relationship between the GFI and poverty alleviation. Is paper introduces a first-order lag term of the green finance development index into the model. E dynamic panel model is built as follows: Poverty alleviation is a dynamic process because of the continuity and inertia of poverty. erefore, dynamic panel models must be used to study the dynamic relationship between the GFI and poverty alleviation. is paper introduces a first-order lag term of the green finance development index into the model. e dynamic panel model is built as follows:
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