How Green Finance Affects Productivity: A Focus on the Yangtze River Delta

Urban agglomerations are concentrated production areas of new-quality productivity (NQP), and developing NQP is an inevitable requirement and obligation to promote the high-quality development of urban agglomerations. It is of great concern whether green finance (GF) can serve as a catalyst in promoting the formation and development of NQP in urban agglomerations. This study selects panel data from 41 cities in the Yangtze River Delta urban agglomeration spanning 2011–2023 to construct a comprehensive indicator system for NQP based on the composition, quality, and function of productive factors in the urban agglomeration, and explores the impact effects, mechanisms of action, spatial spillover effects, and heterogeneity of GF on the development of NQP using a two-way fixed-effects model, an intermediary effect model, and a spatial Durbin model (SDM). The empirical results indicate the following: (1) GF can significantly promote the development of NQP in the Yangtze River Delta urban agglomeration, and there is a significant positive spatial spillover effect. The above conclusions remain valid after a series of robustness tests and endogeneity treatments. (2) The mechanism tests find that industrial structure upgrading and environmental regulation play positive mediating roles in GF’s promotion of NQP development in urban agglomerations. (3) The impact of GF on NQP exhibits significant heterogeneity. In regions with higher levels of economic and financial development, as well as a higher degree of marketization, the promotional effect of GF on NQP is more pronounced. In terms of city size and geographical location, the empowering effect and spatial spillover effect of GF on NQP are more evident in prefecture-level cities and the northern plain area of the Yangtze River Delta. Therefore, it is recommended to implement differentiated GF policies to promote the development of NQP in the Yangtze River Delta urban agglomeration through regional cooperation, green technology innovation, industrial transformation and upgrading, and environmental regulation.