The Impacts of Green Finance Reforms on Urban Energy Efficiency in China

To evaluate the effectiveness of green finance, this study treats China’s green finance reform and innovation pilot zones as a quasi-natural experiment to assess their impact on urban energy efficiency. This research utilizes a panel dataset of 282 Chinese prefecture-level cities from 2010 to 2023 and employs a multi-period difference-in-differences (DID) model. The core dependent variable, urban green total factor energy efficiency (UGTFEE), is quantified using a non-radial Slack-Based Measure (SBM) efficiency model combined with the Malmquist-Luenberger index. The empirical findings reveal four key points. First, the green finance pilot zones significantly enhance UGTFEE, with policy-affected cities demonstrating an average improvement of approximately 2.0% relative to non-pilot cities. Second, this positive impact is transmitted through two primary mechanisms: the advancement of green technology research and development and the deepening of financial market development. Third, the policy’s effectiveness is heterogeneous, varying according to regional characteristics such as geographical location, environmental regulation stringency, and resource endowments. Finally, a negative spatial spillover is identified, wherein the policy creates a siphoning effect that competitively suppresses the UGTFEE of neighboring cities. These findings provide critical theoretical insights and empirical evidence for optimizing green finance initiatives, thereby facilitating urban industrial transformation toward greater green energy efficiency.