Financing Constraints, Carbon Emissions and High-Quality Urban Development—Empirical Evidence from 290 Cities in China

The tightening of the financing environment and global climate change have become urgent problems for high-quality economic development all over the world. Facing these challenges, the Chinese government is committed to alleviating regional financing constraints and setting carbon-emission reduction targets. However, are these measures effective for high-quality urban development? This paper attempts to use unbalanced panel data from 290 cities on the Chinese mainland from 2004–2017 to provide an answer to the problem using a scatter plot and the mediator effect model. Results show that: (1) financing constraints limit the funds required for urban development, which is not conducive to high-quality urban development, but high-quality urban development has the characteristics of “path dependence”; (2) In the context of environmental regulation, financing constraints are mainly enacted through reducing carbon emissions, which is inconducive to high-quality urban development. Carbon emissions are the transmission mechanism whereby financing constraints affect high-quality urban development; (3) Cities with large financing constraints have insufficient capital investment for high-quality urban development, and the aggravation of financing constraints has an increasingly obvious inhibitory effect on high-quality urban development. Moreover, due to the effect of the global economic crisis in 2008, the negative effect of financing constraints on high-quality urban development had the characteristics of U-shaped fluctuation. Thus, this paper believes that the implementation of China’s double carbon policy is at the expense of high-quality urban development, and there is a long way to go before high-quality urban development reaches later stages. Other countries should carefully weigh up the relationship between environmental pollution and economic development when facing financing constraints.