IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i18p8437-d1753761.html

Green Value from Technology Finance Policies Towards Sustainability: Evidence of a Quasi-Natural Experiment on Urban Carbon Reduction in China

Author

Listed:
  • Jiaji An

    (School of Finance, Jilin University of Finance and Economics, Changchun 130117, China)

  • Hongyuan Bi

    (School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • He Di

    (School of Business and Management, Jilin University, Changchun 130015, China)

  • Jingze Lin

    (Jilin Economic Research Center, Jilin University of Finance and Economics, Changchun 130117, China)

  • Xinran Zhao

    (School of Finance, Jilin University of Finance and Economics, Changchun 130117, China)

Abstract

Innovation can balance environmental objectives while enhancing economic efficiency. However, its policy dimension has largely been overlooked. Leveraging financial instruments to promote technological innovation has become a primary policy tool. This study treats China’s pilot policies on technology finance integration as a quasi-natural experiment and constructs a multi-period difference-in-differences model with 5434 panel datapoints from 286 cities between 2005 and 2023. Within the environmental Kuznets curve theoretical framework, we examine the impact of technology finance policies on urban carbon emissions. The findings reveal that these policies significantly curb urban carbon emissions. Heterogeneity analysis shows stronger effects in large, non-resource-dependent eastern cities than in others. Mechanism tests indicate that these policies primarily generate green value through technological innovation and industrial structure upgrading, with the latter demonstrating a significantly stronger effect than the former. Our findings regarding the outstanding role of industrial structure upgrading may challenge and reorient the literature’s general focus on green technologies. This study employs economic principles to offer new insights into innovation’s effective balancing of economic growth and sustainability, broadening discussions about the green value of financial policy tools.

Suggested Citation

  • Jiaji An & Hongyuan Bi & He Di & Jingze Lin & Xinran Zhao, 2025. "Green Value from Technology Finance Policies Towards Sustainability: Evidence of a Quasi-Natural Experiment on Urban Carbon Reduction in China," Sustainability, MDPI, vol. 17(18), pages 1-23, September.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:18:p:8437-:d:1753761
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/18/8437/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/18/8437/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tekic, Anja & Tekic, Zeljko, 2025. "Resource endowments as antecedents of high-impact entrepreneurship: Embracing the complexity of entrepreneurial ecosystems," Journal of Business Research, Elsevier, vol. 197(C).
    2. Jinhua Sun & Decai Tang & Haojia Kong & Valentina Boamah, 2022. "Impact of Industrial Structure Upgrading on Green Total Factor Productivity in the Yangtze River Economic Belt," IJERPH, MDPI, vol. 19(6), pages 1-15, March.
    3. Trond-Arne Borgersen & Roswitha M. King, 2016. "Industrial structure and jobless growth in transition economies," Post-Communist Economies, Taylor & Francis Journals, vol. 28(4), pages 520-536, October.
    4. Song, Xiaoling & Yao, Yumeng & Wu, Xueke, 2023. "Digital finance, technological innovation, and carbon dioxide emissions," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 482-494.
    5. Wang, Keying & Wu, Meng & Sun, Yongping & Shi, Xunpeng & Sun, Ao & Zhang, Ping, 2019. "Resource abundance, industrial structure, and regional carbon emissions efficiency in China," Resources Policy, Elsevier, vol. 60(C), pages 203-214.
    6. Cook, Nikolai, 2024. "Increasing student access through aid: Differences in difference-in-differences estimates," Economics Letters, Elsevier, vol. 238(C).
    7. Zisong Sun & Changshuai Cao & Zhengxia He & Chao Feng, 2023. "Examining the Coupling Coordination Relationship between Digital Inclusive Finance and Technological Innovation from a Spatial Spillover Perspective: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(4), pages 1219-1231, March.
    8. Dezhbakhsh, Hashem & Levy, Daniel, 2022. "Interpolation and shock persistence of prewar U.S. macroeconomic time series: A reconsideration," Economics Letters, Elsevier, vol. 213(C).
    9. Chen, Yi-Chun & Hung, Mingyi & Wang, Yongxiang, 2018. "The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China," Journal of Accounting and Economics, Elsevier, vol. 65(1), pages 169-190.
    10. Laeven, Luc & Levine, Ross & Michalopoulos, Stelios, 2015. "Financial innovation and endogenous growth," Journal of Financial Intermediation, Elsevier, vol. 24(1), pages 1-24.
    11. Shao, Yanmin & Xu, Kunliang & Shan, Yuan George, 2024. "Leveraging corporate digitalization for green technology innovation: The mediating role of resource endowments," Technovation, Elsevier, vol. 133(C).
    12. Stephen Hall & Timothy J Foxon & Ronan Bolton, 2017. "Investing in low-carbon transitions: energy finance as an adaptive market," Climate Policy, Taylor & Francis Journals, vol. 17(3), pages 280-298, April.
    13. Goodman-Bacon, Andrew, 2021. "Difference-in-differences with variation in treatment timing," Journal of Econometrics, Elsevier, vol. 225(2), pages 254-277.
    14. Hardy, Bryan & Sever, Can, 2021. "Financial crises and innovation," European Economic Review, Elsevier, vol. 138(C).
    15. Erin Hartman & F. Daniel Hidalgo, 2018. "An Equivalence Approach to Balance and Placebo Tests," American Journal of Political Science, John Wiley & Sons, vol. 62(4), pages 1000-1013, October.
    16. Atif, Muhammad & Bottura, Marco & Yasin, Raheel, 2024. "Public issues and public expectations: Disentangling responsibility discourse dimensions in CSR and sustainability books," European Management Journal, Elsevier, vol. 42(6), pages 957-967.
    17. Jaeger, William K. & Kolpin, Van & Siegel, Ryan, 2023. "The environmental Kuznets curve reconsidered," Energy Economics, Elsevier, vol. 120(C).
    18. Zhu, Tianqi & Zhao, Lijuan & Zhao, Lu & Kang, Xiaohong, 2025. "Impact of financial decentralisation on industrial structure upgrading: From the coordination perspective of fiscal decentralisation," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    19. Derese Kebede Teklie & Burak DoÄŸan, 2024. "Analyzing the Dynamics: Asymmetric Effects of Economic Growth, Technological Innovation, and Renewable Energy on Carbon Emissions in Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 509-519, September.
    20. Yanran Liu & Lei Tang & Guangfu Liu, 2022. "Carbon Dioxide Emissions Reduction through Technological Innovation: Empirical Evidence from Chinese Provinces," IJERPH, MDPI, vol. 19(15), pages 1-19, August.
    21. Runde Gu & Chunfa Li & Dongdong Li & Yangyang Yang & Shan Gu, 2022. "The Impact of Rationalization and Upgrading of Industrial Structure on Carbon Emissions in the Beijing-Tianjin-Hebei Urban Agglomeration," IJERPH, MDPI, vol. 19(13), pages 1-16, June.
    22. Zhong Wang & Mingyu Wu & Shixiang Li & Changji Wang, 2021. "The Effect Evaluation of China’s Energy-Consuming Right Trading Policy: Empirical Analysis Based on PSM-DID," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    23. Wei, Shuping & Jiang, Fangxin & Pan, Jiawei & Cai, Qihai, 2023. "Financial innovation, government auditing and corporate high-quality development: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PD).
    24. Bryce L. Jorgensen & Diane Foster & Jakob F. Jensen & Elisabete Vieira, 2017. "Financial Attitudes and Responsible Spending Behavior of Emerging Adults: Does Geographic Location Matter?," Journal of Family and Economic Issues, Springer, vol. 38(1), pages 70-83, March.
    25. Haider Mahmood & Maham Furqan & Muhammad Shahid Hassan & Soumen Rej, 2023. "The Environmental Kuznets Curve (EKC) Hypothesis in China: A Review," Sustainability, MDPI, vol. 15(7), pages 1-32, April.
    26. Kollenbach, Gilbert & Schopf, Mark, 2022. "Unilaterally optimal climate policy and the green paradox," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    27. Wenli Wang & Jing Zhang & Yunpeng Wang, 2022. "Capital Supervision, Information Disclosure and Risk-taking—Evidence from Rural Commercial Banks in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(8), pages 2273-2289, June.
    28. Baker, Andrew C. & Larcker, David F. & Wang, Charles C.Y., 2022. "How much should we trust staggered difference-in-differences estimates?," Journal of Financial Economics, Elsevier, vol. 144(2), pages 370-395.
    29. Li, Guangchen & Wei, Weixian, 2021. "Financial development, openness, innovation, carbon emissions, and economic growth in China," Energy Economics, Elsevier, vol. 97(C).
    30. Cegarra-Navarro, Juan-Gabriel & Reverte, Carmelo & Gómez-Melero, Eduardo & Wensley, Anthony K.P., 2016. "Linking social and economic responsibilities with financial performance: The role of innovation," European Management Journal, Elsevier, vol. 34(5), pages 530-539.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sahbi Farhani & Naif Alsagr, 2026. "Turbulence and Transformation: When Global Shocks Drive Major Emerging Economies' Climate Progress," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(2), pages 2869-2892, April.

    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. Jiaji An & He Di, 2024. "How Can Financial Innovation Curb Carbon Emissions in China? Exploring the Mediating Role of Industrial Structure Upgrading from a Spatial Perspective," Sustainability, MDPI, vol. 16(11), pages 1-20, May.
    2. Yu, Yantuan & Zhang, Ning, 2025. "Towards low-carbon development through integration of technology and finance: Quasi-experimental evidence from China," Research in International Business and Finance, Elsevier, vol. 80(C).
    3. Shih-Ting Huang & Yuqi Zhang & Tianjiao Yi & Li Zhang, 2025. "How Does the Ecological and Environmental Damage Compensation System Affect Industrial Wastewater Discharge in China?," Sustainability, MDPI, vol. 17(5), pages 1-18, February.
    4. Wu, Xiting & Luo, Le & You, Jiaxing, 2023. "Actions speak louder than words: Environmental law enforcement externalities and access to bank loans," Journal of Banking & Finance, Elsevier, vol. 153(C).
    5. Schoonjans, Eline, 2024. "From diversity to sustainability: Environmental and social spillover effects of board gender quotas," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 314-331.
    6. Li, Shuoshuo & Liu, Yaobin & Elahi, Ehsan & Meng, Xiao & Deng, Weifeng, 2023. "A new type of urbanization policy and transition of low-carbon society: A "local- neighborhood" perspective," Land Use Policy, Elsevier, vol. 131(C).
    7. Haozhe Song & Gunnar Rimmel, 2025. "Debtholders' reaction to sustainability reporting regulations: International evidence," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 88-115, January.
    8. Shirin, Farzana, 2023. "Does Teacher Salary Support Improve Student Learning Outcomes," 2023 Annual Meeting, July 23-25, Washington D.C. 335793, Agricultural and Applied Economics Association.
    9. Wu, Libo & Zhou, Yang, 2025. "Social norms and energy conservation in China," Resource and Energy Economics, Elsevier, vol. 82(C).
    10. Shipeng Yan & Wei Jiang & Yue Xu, 2026. "Global investors, hidden suppliers: how institutions shape the impact of stock market liberalization programs on corporate responsibility," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 57(2), pages 197-219, March.
    11. Brown, David P. & Muehlenbachs, Lucija, 2024. "The value of electricity reliability: Evidence from battery adoption," Journal of Public Economics, Elsevier, vol. 239(C).
    12. Matthias Florian Sahli & Alexander Cuntz, 2026. "Is there a premium for legacy artists? The death effect in exhibition shows and auction transactions," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 50(1), pages 1-34, March.
    13. Cordonnier, Victor & Covarrubias, Katia Alejandra & de la O Campos, Ana Paula, 2024. "The impacts of widespread agricultural interventions on yields and food security in Ethiopia☆," Food Policy, Elsevier, vol. 124(C).
    14. Bui, Dien Giau & Chen, Yehning & Chen, Yan-Shing & Lin, Chih-Yung, 2023. "Managerial ability and financial statement disaggregation decisions," Journal of Empirical Finance, Elsevier, vol. 74(C).
    15. Kim, Sehoon & Kumar, Nitish & Lee, Jongsub & Oh, Junho, 2025. "ESG lending," Journal of Financial Economics, Elsevier, vol. 173(C).
    16. Pei Zhao & Junhua Guo & Yang Wang, 2023. "How Does the Digital Economy Affect Green Development?—Evidence from 284 Cities in China," Sustainability, MDPI, vol. 15(15), pages 1-24, July.
    17. Coraggio, Luca & Pagano, Marco & Scognamiglio, Annalisa & Tåg, Joacim, 2025. "JAQ of all trades: Job mismatch, firm productivity and managerial quality," Journal of Financial Economics, Elsevier, vol. 164(C).
    18. Mark Kattenberg & Bas Scheer & Jurre Thiel, 2023. "Causal forests with fixed effects for treatment effect heterogeneity in difference-in-differences," CPB Discussion Paper 452, CPB Netherlands Bureau for Economic Policy Analysis.
    19. Li, Pei & Liu, Kaihao & Lu, Yi & Peng, Lu, 2025. "Organizing regulatory structure and local air quality: Evidence from the environmental vertical management reform in China," Journal of Comparative Economics, Elsevier, vol. 53(1), pages 139-164.
    20. Chen, Jinrui & Zhang, Yichang, 2025. "Substantive change or strategic response? Digital industrial convergence policy and urban green innovation," Innovation and Green Development, Elsevier, vol. 4(1).

    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:18:p:8437-:d:1753761. 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.