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Green financial policy, environmental regulation, and energy use efficiency

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  • Ren, Zhuoya
  • Bo, Yuan
  • Lei, Yuanye

Abstract

This study analyzes 280 cities at or above the prefecture level from 2010 to 2021, employing a difference-in-differences model to assess the impact of the green finance reform and innovation pilot zones on urban green total factor energy efficiency. The findings indicate green finance reform and innovation pilot zones significantly enhance urban green total factor energy efficiency, with environmental regulation serving as a positive moderating factor, which is validated using a series of robustness checks. The heterogeneity analysis reveals that the pilot policy has a more pronounced effect on improving green total factor energy efficiency in cities located in the eastern region. This study addresses the critical question of whether the green finance pilot policy can boost urban green total factor energy efficiency, providing empirical evidence and policy recommendations for China's green finance reforms to promote sustainable urban development. Furthermore, the results demonstrate the role of environmental regulation in amplifying the effects of green finance policies, offering valuable insights for further optimizing the design of such policies.

Suggested Citation

  • Ren, Zhuoya & Bo, Yuan & Lei, Yuanye, 2025. "Green financial policy, environmental regulation, and energy use efficiency," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612324017409
    DOI: 10.1016/j.frl.2024.106711
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    1. Cui, Jingbo & Dai, Jing & Wang, Zhenxuan & Zhao, Xiande, 2022. "Does Environmental Regulation Induce Green Innovation? A Panel Study of Chinese Listed Firms," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
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    1. Ying Peng & Xinyue Wang & Weilong Gao, 2025. "The Impact of Data Element Marketization on Green Total Factor Energy Efficiency: Empirical Evidence from China," Sustainability, MDPI, vol. 17(9), pages 1-25, May.

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    Keywords

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    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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