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The Impact of Green Finance on High-Quality Economic Development in China: Vertical Fiscal Imbalance as the Moderating Effect

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  • Zhao Yang

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China)

Abstract

The vigorous development of green finance has become a national strategy in China. Green finance is gradually becoming a key driver of high-quality economic development and a key area of concern for China’s economy and ecological environment. Based on the panel data of 30 Chinese provinces from 2001 to 2019, we analyzed the impact and mechanism of vertical fiscal imbalance (VFI) and green finance (GF) on high-quality economic development (HQD) and then used the fixed-effect model and spatial Durbin model for empirical testing. We found that GF can significantly contribute to HQD, but VFI has a negative moderating effect in contrast to the positive effect of GF on HQD. This negative moderating effect is strongest in the central region. According to the analysis of the spatial econometric model based on geography, economy, and the nested spatial weight matrix, we found that the local GF has a negative spatial transmission effect on the HQD of other regions. Therefore, it is recommended that the coordinated development of green finance among regions be promoted, while affairs and expenditure responsibilities be reasonably distributed between the central and local governments to drive HQD effectively.

Suggested Citation

  • Zhao Yang, 2023. "The Impact of Green Finance on High-Quality Economic Development in China: Vertical Fiscal Imbalance as the Moderating Effect," Sustainability, MDPI, vol. 15(12), pages 1-16, June.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:12:p:9350-:d:1167707
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    Cited by:

    1. Tianhao Yang & Guofeng Gu, 2023. "Spatial–Temporal Evolution and Driving Factors of China’s High-Quality Economic Development," Sustainability, MDPI, vol. 15(23), pages 1-21, November.
    2. Can Li & Qi He & Han Ji & Shengguo Yu & Jiao Wang, 2023. "Reexamining the Impact of Global Value Chain Participation on Regional Economic Growth: New Evidence Based on a Nonlinear Model and Spatial Spillover Effects with Panel Data from Chinese Cities," Sustainability, MDPI, vol. 15(18), pages 1-31, September.

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