The Interaction between Government Guidance Mechanisms and Regional Economies

DOI: https://doi.org/10.62517/jmsd.202512613

Author(s)

Yiran Chang

Affiliation(s)

Department of Finance, Tianjin University of Finance and Economics, Tianjin, China

Abstract

Green finance plays a vital role in ensuring adequate and effective financial support for the broad green transition of China's economy and society. Nevertheless, the degree of success in this transformation differs considerably across provinces. Using data from 20 provincial-level regions covering the years 2010 to 2020, this study incorporates seven control variables and applies a difference-in-differences (DID) model to examine the influence and pathways of green finance policies on regional low-carbon development. The findings indicate that such policies have made a clear contribution to advancing low-carbon economic growth. Further analysis shows that improvements in innovation capacity and adjustments in the energy mix are the main channels through which the policies exert their effects. The heterogeneity test demonstrates that the positive impacts are most evident in eastern provinces and areas with more developed financial systems. Accordingly, it is suggested that differentiated green finance strategies be designed for regions with varying economic conditions and levels of financial development, placing greater focus on supporting innovative industries and improving the energy structure.

Keywords

Green Finance Policy; Low-Carbon Transformation; Regional Differences; DID Model

References

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