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How Can Government Regulation Reinforce the Low-Carbon Effects of Green Finance in China? Heterogeneity of Resource-Based Cities and High-Energy-Consuming Cities

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Listed:
  • Yuying Hu

    (College of Management and Economics, Tiangong University, Tianjin 300387, China)

  • Yue Deng

    (College of Management and Economics, Tiangong University, Tianjin 300387, China)

  • Zhilun Jiao

    (College of Economic and Social Development, Nankai University, Tianjin 300071, China)

Abstract

Based on panel data of 273 prefecture-level cities in China from 2006 to 2022, this study empirically examines the impact and mechanism of green finance on urban low-carbon development from the perspective of government regulation. The study yields the following key results: First, green finance significantly promotes urban low-carbon development, and this finding remains valid after addressing endogeneity issues and conducting a series of robustness tests. Second, government regulation strengthens the low-carbon effect of green finance through two pathways: market-oriented reform and urban land planning. Third, the low-carbon effect of green finance is more pronounced in resource-based cities and low-energy-consuming cities, which corresponds to urban disparities in development stages and resource constraints. Given these results, this study proposes two targeted recommendations: institutionalizing the coordination mechanism between land use and carbon markets and implementing context-specific green finance strategies via urban differentiation approaches.

Suggested Citation

  • Yuying Hu & Yue Deng & Zhilun Jiao, 2025. "How Can Government Regulation Reinforce the Low-Carbon Effects of Green Finance in China? Heterogeneity of Resource-Based Cities and High-Energy-Consuming Cities," JRFM, MDPI, vol. 18(9), pages 1-19, September.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:9:p:511-:d:1749950
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    References listed on IDEAS

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    1. Chen, Xing & Lin, Boqiang, 2021. "Towards carbon neutrality by implementing carbon emissions trading scheme: Policy evaluation in China," Energy Policy, Elsevier, vol. 157(C).
    2. Alharbi, Samar S. & Al Mamun, Md & Boubaker, Sabri & Rizvi, Syed Kumail Abbas, 2023. "Green finance and renewable energy: A worldwide evidence," Energy Economics, Elsevier, vol. 118(C).
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