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Has the establishment of green finance reform and innovation pilot zones improved air quality? Evidence from China

Author

Listed:
  • Xiaoyang Xu

    (Jiangsu University
    Jiangsu University)

  • Yufan Xie

    (Jiangsu University)

  • Emma Serwaa Obobisa

    (Jiangsu University)

  • Huaping Sun

    (Jiangsu University)

Abstract

The role of finance in environmental sustainability is becoming increasingly important. This study conducts a quasi-natural experiment using a sample of 146 prefecture-level cities from 2015 to 2019. It adopts difference-in-differences to examine the impact of China’s green finance reform and innovations pilot zones (GFRIs) on urban air quality. The findings show that air quality has improved after the establishment of GFRIs, indicating that GFRIs have the potential to control air pollution levels. The mechanism tests indicate that the GFRIs are conducive to improving air quality through industrial structure upgrading and green innovation. Furthermore, the heterogeneity analyses show that the air quality in the south of the Qinling Mountains-Huaihe River line, in large and well-developed financially scaled cities, has improved significantly after the establishment of GFRIs.

Suggested Citation

  • Xiaoyang Xu & Yufan Xie & Emma Serwaa Obobisa & Huaping Sun, 2023. "Has the establishment of green finance reform and innovation pilot zones improved air quality? Evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    • Handle: RePEc:pal:palcom:v:10:y:2023:i:1:d:10.1057_s41599-023-01773-0
    DOI: 10.1057/s41599-023-01773-0
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