Evaluating the synergy of environmental regulation and green finance: A pressure-resource framework

Promoting green economic efficiency has become a central objective of China's sustainable transition, requiring the coordinated deployment of multiple policy tools. This study investigates how environmental regulation and green finance jointly shape green development outcomes, and whether their combined application generates benefits beyond their individual effects. Building on a pressure-resource perspective, we develop a theoretical framework and conduct empirical tests using a balanced panel covering 287 prefecture-level cities from 2008 to 2022. The model assesses both separate and joint policy effects and further identifies the underlying transmission channels through emission constraints, innovation-driven growth, and financing support. The results show that although each policy independently improves green economic efficiency, their joint implementation further strengthens and enhances the effect, producing a synergy-enhancing outcome. Mechanism analysis further reveals that the synergy operates mainly through constraints on emissions, enhanced innovation dynamics, and targeted financing support. The positive effects are evident across varying levels of environmental pollution and energy dependence. However, in regions with a low level of industrial structure upgrading, the reinforcing effect of policy interaction weakens, suggesting that structural rigidities limit the potential gains from policy overlap.