IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i10p4713-d1660310.html

Ripple Effect or Spatial Interaction? A Spatial Analysis of Green Finance and Carbon Emissions in the Yellow River Basin

Author

Listed:
  • Jiayu Ru

    (School of Economics and Management, Xinjiang University, Urumqi 830049, China)

  • Lu Gan

    (School of Economics and Management, Xinjiang University, Urumqi 830049, China)

  • Gulinaer Yusufu

    (School of Economics and Management, Xinjiang University, Urumqi 830049, China)

Abstract

Grounded in the theory of new economic geography, this research develops a comprehensive theoretical framework to examine the spatial interaction mechanisms between the Green Finance Index and carbon emissions. Employing a range of econometric techniques—including three-dimensional kernel density estimation, spatial quantile regression, bivariate spatial autocorrelation analysis, and the spatial linkage equation model—the dynamic evolution, spatial pattern shifts, and mutual influences of green finance and carbon emissions in the middle and lower reaches of the Yellow River from 2003 to 2022 are systematically assessed. The findings indicate that (1) both carbon emissions and the Green Finance Index have experienced a trajectory of continuous growth, phased decline, and structural optimization, accompanied by a gradual shift in the regional center of gravity from coastal economic zones towards resource-intensive and traditional industry-concentrated areas; (2) significant spatial clustering is evident for both green finance and carbon emissions, demonstrating a strong spatial correlation and regional synergy effects; (3) a persistent negative spatial correlation exists between green finance and carbon emissions; and (4) green finance exerts a stable negative spatial spillover effect on carbon emissions, suggesting that the influence of green finance extends beyond localities to adjacent regions through spatial externalities, manifesting pronounced spatial transmission and linkage characteristics. By unveiling the bidirectional spatial association between green finance and carbon emissions, this study highlights the pivotal role of green finance in driving regional low-carbon transitions. The results provide theoretical insights for optimizing green finance policies within the Yellow River Basin and offer valuable international references for similar regional low-carbon development initiatives.

Suggested Citation

  • Jiayu Ru & Lu Gan & Gulinaer Yusufu, 2025. "Ripple Effect or Spatial Interaction? A Spatial Analysis of Green Finance and Carbon Emissions in the Yellow River Basin," Sustainability, MDPI, vol. 17(10), pages 1-35, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:10:p:4713-:d:1660310
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/10/4713/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/10/4713/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kelejian, Harry H. & Prucha, Ingmar R., 2004. "Estimation of simultaneous systems of spatially interrelated cross sectional equations," Journal of Econometrics, Elsevier, vol. 118(1-2), pages 27-50.
    2. Di Zhou & Guo Chen & Dongchun Xie, 2025. "Can green financial pilot policy reduce firms’ carbon emissions? Evidence from Chinese manufacturing firms," Economic Change and Restructuring, Springer, vol. 58(1), pages 1-30, February.
    3. De Haas, Ralph & Popov, Alexander, 2019. "Finance and carbon emissions," Working Paper Series 2318, European Central Bank.
    4. Ralph De Haas & Alexander Popov, 2023. "Finance and Green Growth," The Economic Journal, Royal Economic Society, vol. 133(650), pages 637-668.
    5. Lung-fei Lee, 2003. "Best Spatial Two-Stage Least Squares Estimators for a Spatial Autoregressive Model with Autoregressive Disturbances," Econometric Reviews, Taylor & Francis Journals, vol. 22(4), pages 307-335.
    6. Zhang, Yue-Jun, 2011. "The impact of financial development on carbon emissions: An empirical analysis in China," Energy Policy, Elsevier, vol. 39(4), pages 2197-2203, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wei Qiu & Yinghua Li & Haitao Wu, 2023. "The role of direct financing on regional green development: inhibition or promotion?," Economic Change and Restructuring, Springer, vol. 56(5), pages 3665-3699, October.
    2. Ngo, Thanh & Trinh, Hai Hong & Haouas, Ilham & Ullah, Subhan, 2022. "Examining the bidirectional nexus between financial development and green growth: International evidence through the roles of human capital and education expenditure," Resources Policy, Elsevier, vol. 79(C).
    3. Bijnens, Gert & Hutchinson, John & Saint Guilhem, Arthur, 2026. "Navigating the carbon price shock: Electricity costs and employment reallocation in Europe," Utilities Policy, Elsevier, vol. 99(C).
    4. Laeven, Luc & Popov, Alexander, 2023. "Carbon taxes and the geography of fossil lending," Journal of International Economics, Elsevier, vol. 144(C).
    5. Buchetti, Bruno & Miquel-Flores, Ixart & Perdichizzi, Salvatore & Reghezza, Alessio & Lin, Luca X., 2024. "Loan guarantee and portfolio greening: evidence from European credit registers," Working Paper Series 2916, European Central Bank.
    6. Jorge Luis Casanova Ferrando, 2019. "The Airbnb Effect on theRental Market: the Case of Madrid," Studies on the Spanish Economy eee2019-34, FEDEA.
    7. Gambacorta, Leonardo & Pancotto, Livia & Reghezza, Alessio & Spaggiari, Martina, 2022. "Gender diversity in bank boardrooms and green lending: Evidence from euro area credit register data," CEPR Discussion Papers 17650, Centre for Economic Policy Research.
    8. Martin, R. & de Haas, Ralph & Muuls, Mirabelle & Schweiger, Helena, 2021. "Managerial and Financial Barriers to the Net-Zero Transition," Other publications TiSEM d95224cf-6fd8-486b-b9d7-4, Tilburg University, School of Economics and Management.
    9. Christian Haas & Karol Kempa, 2023. "Low-Carbon Investment and Credit Rationing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(1), pages 109-145, October.
    10. Ren, Yimeng & Li, Zhe & Zhu, Xuening & Gao, Yuan & Wang, Hansheng, 2024. "Distributed estimation and inference for spatial autoregression model with large scale networks," Journal of Econometrics, Elsevier, vol. 238(2).
    11. Ibishova, Banovsha & Misund, Bård & Tveterås, Ragnar, 2024. "Driving green: Financial benefits of carbon emission reduction in companies," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    12. Borsuk, Marcin & Eugster, Nicolas & Klein, Paul-Olivier & Kowalewski, Oskar, 2024. "Family firms and carbon emissions," Journal of Corporate Finance, Elsevier, vol. 89(C).
    13. Yang, Kai & Lee, Lung-fei, 2017. "Identification and QML estimation of multivariate and simultaneous equations spatial autoregressive models," Journal of Econometrics, Elsevier, vol. 196(1), pages 196-214.
    14. Xing Zhao & Yuanyuan Qian, 2024. "Does Digital Technology Promote Green Innovation Performance?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7568-7587, June.
    15. De Haas, Ralph & Popov, Alexander, 2019. "Finance and decarbonisation: why equity markets do it better," Research Bulletin, European Central Bank, vol. 64.
    16. William C. Horrace & Hyunseok Jung & Shane Sanders, 2022. "Network Competition and Team Chemistry in the NBA," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 40(1), pages 35-49, January.
    17. Ralph De Haas & Ralf Martin & Mirabelle Muuls & Helena Schweiger, 2022. "Managerial and financial barriers during the green transition," CEP Discussion Papers dp1837, Centre for Economic Performance, LSE.
    18. Tian Xiong & Kaan Celebi & Paul J. J. Welfens, 2022. "OECD countries’ twin long-run challenge: The impact of aging dynamics and increasing natural disasters on savings ratios," International Economics and Economic Policy, Springer, vol. 19(4), pages 741-759, October.
    19. AMBA OYON, Claude Marius & Mbratana, Taoufiki, 2017. "Simultaneous equation models with spatially autocorrelated error components," MPRA Paper 82395, University Library of Munich, Germany.
    20. Bao Hoang Nguyen & Zhichao Wang & Valentin Zelenyuk, 2025. "Efficiency of Queensland public hospitals via spatial panel stochastic frontier models," Empirical Economics, Springer, vol. 69(5), pages 2865-2900, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:10:p:4713-:d:1660310. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.