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Role of green finance and investment in sustainable resource development in China

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  • Yang, Xiaoyun

Abstract

This research employs the Autoregressive Distributed Lag (ARDL) method to evaluate the effects of the size of the green finance market on the generation of wind power, solar power, and hydropower in China from 1990 to 2021. The empirical findings indicate that a 1% increase in the size of the green finance market is associated with a nearly 0.47% increase in wind power generation, a 0.36% increase in solar power generation, and a 0.15% increase in hydropower generation in China. Several control variables, including the Consumer Price Index (CPI), exhibit a negative impact on renewable energy sources in the short term, while China's Gross Domestic Product (GDP), small and medium-sized enterprises (SMEs), and foreign direct investment (FDI) have positive effects. In the long run, the size of the green finance market remains crucial for the development of renewable energy, with wind power demonstrating a more significant influence. To promote green finance and sustainable energy in China, practical policies could involve the digitalization of green finance markets, the establishment of sustainable education programs to enhance public awareness of green initiatives, the improvement of regulations governing green FDI, and the utilization of technologies such as big data, artificial intelligence (AI), and financial technology (fintech) to enhance green investments.

Suggested Citation

  • Yang, Xiaoyun, 2023. "Role of green finance and investment in sustainable resource development in China," Resources Policy, Elsevier, vol. 86(PA).
    • Handle: RePEc:eee:jrpoli:v:86:y:2023:i:pa:s0301420723009303
    DOI: 10.1016/j.resourpol.2023.104219
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    References listed on IDEAS

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    Cited by:

    1. Li, Dongxia, 2024. "Green finance, fossil fuel efficiency, and sustainable development in OECD," Resources Policy, Elsevier, vol. 98(C).
    2. Ye, Wuyi & Hu, Chenglong & Guo, Ranran, 2024. "Tail risk network of Chinese green-related stocks market," Finance Research Letters, Elsevier, vol. 67(PB).
    3. repec:rjr:romjef:v::y:2025:i:4:p:56-85 is not listed on IDEAS
    4. Yunqian Hu & Pu Hao, 2024. "Research on the Impact of Scientific and Technological Talent Agglomeration on Green Development," Journal of Information Economics, Anser Press, vol. 2(3), pages 70-89, September.
    5. Zhang, Qiufeng & Huang, Huan & Chen, Liang & Wang, Yushi, 2025. "How does green finance affect carbon emission intensity? The role of green technology innovation and internet development," International Review of Economics & Finance, Elsevier, vol. 99(C).
    6. Rongrong Li & Qiang Wang & Ting Yang, 2025. "Digital economy and carbon efficiency: the roles of population aging and human capital," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-16, December.
    7. Yarong Shi & Bo Yang, 2025. "Green finance instruments and empowering sustainability in East Asian economies," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-9, December.
    8. Chen, Jin & Meng, Wenfei & Dong, Yang & Zhou, Wei, 2025. "Geographic matching analysis between green finance development and carbon emissions in China’s new era of environmental transition," Research in International Business and Finance, Elsevier, vol. 73(PA).
    9. Wang, Jinwei & Li, Xiaofan & Zhang, Ting & He, Chonghe & Zhu, Liwen, 2025. "The impact of green finance reform and innovation policies on green investors in China," Finance Research Letters, Elsevier, vol. 83(C).
    10. Yanqiang Lou, 2025. "Green finance market and carbon neutralization capacity in China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-8, December.
    11. Li, Qi & Lei, Hanyun & Yu, Minggui, 2025. "Green finance, green innovation and carbon intensity," International Review of Financial Analysis, Elsevier, vol. 106(C).

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    Keywords

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    JEL classification:

    • 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
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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