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Impact of green finance incentive policies on China's carbon neutrality capability: An evaluation based on the difference-in-differences model

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  • Wang, Danting
  • Sun, Yemeng

Abstract

Using panel data from Chinese provinces and cities from 2007 to 2022 and a difference-in-differences model, this study analyzes the relationship between green finance incentive policies (GFIPs) and China's carbon neutrality capabilities. Findings indicate that GFIPs significantly improve China's carbon neutrality capabilities. These policies alleviate financing constraints in provinces and cities, allowing us to accelerate the advancement of carbon neutrality capacities. Furthermore, fiscal expenditure intensity indicates a significant threshold effect in the relationship between GFIPs and China's goal of carbon neutrality.

Suggested Citation

  • Wang, Danting & Sun, Yemeng, 2025. "Impact of green finance incentive policies on China's carbon neutrality capability: An evaluation based on the difference-in-differences model," Finance Research Letters, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003307
    DOI: 10.1016/j.frl.2025.107066
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