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Ecological service value and the development of green finance: The grouping effect of environmental penalty intensity

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  • Yu, Jingjing
  • Liang, Yanhong
  • Wang, Kang

Abstract

Based on data from 2014 to 2023, this study examines the impact of Ecosystem Services Value (ESV) on green finance and explores the heterogeneous effects of environmental penalty intensity and government budget levels. The findings indicate that the influence of ESV on green finance follows a U-shaped effect; specifically, at lower levels of ESV, the demand for green finance is suppressed. However, once ESV reaches a certain threshold, the demand for green finance significantly increases. Additionally, environmental penalty intensity and government budget levels exhibit significant heterogeneity in their relationship with ESV and green finance. In regions with high environmental penalty intensity and high government budgets, the promotional effect of ESV on green finance is even more pronounced.

Suggested Citation

  • Yu, Jingjing & Liang, Yanhong & Wang, Kang, 2025. "Ecological service value and the development of green finance: The grouping effect of environmental penalty intensity," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325017015
    DOI: 10.1016/j.frl.2025.108447
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