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Can Financial Agglomeration Development Reduce Carbon Emissions? Evidence from the Yangtze River Delta Region of China

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  • Qun He

    (School of Management Engineering, Nanjing University of Information Science and Technology, Nanjing 210044, China)

  • Aijun Sun

    (School of Business, Jiangsu Second Normal University, Nanjing 210013, China)

  • Yu Hua

    (School of Business, Jiangsu Second Normal University, Nanjing 210013, China)

Abstract

Reducing carbon emissions is a crucial measure for achieving sustainable development. The financial industry exhibits remarkable spatial agglomeration characteristics, which play a pivotal role in advancing carbon emission reduction and facilitating energy transformation. Using panel data from 41 cities in the Yangtze River Delta from 2008 to 2019, this study employed a spatial econometrics model to investigate the impacts and spatial spillover effects from the development of financial agglomeration on carbon emissions and the associated underlying mechanisms. The research shows that (1) there is an uneven spatial distribution of carbon emissions and financial development within the Yangtze River Delta region of China; (2) an inverted U-shaped relationship exists between financial agglomeration and carbon emissions, and only Shanghai’s level of financial agglomeration exceeds the extremum point; (3) financial agglomeration shows a negative spatial spillover effect on carbon emissions; and (4) financial agglomeration can promote industrial movement toward reducing carbon emissions. The study suggests some strategies for carbon reduction in China.

Suggested Citation

  • Qun He & Aijun Sun & Yu Hua, 2024. "Can Financial Agglomeration Development Reduce Carbon Emissions? Evidence from the Yangtze River Delta Region of China," Sustainability, MDPI, vol. 16(5), pages 1-22, February.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:5:p:1718-:d:1341842
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