IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v46y2025i3p123-163.html
   My bibliography  Save this article

The Effects of Regional Banks on Carbon Emissions: A Quasi-Natural Experiment of City Commercial Banks in China

Author

Listed:
  • Xiaoxiao Zhou
  • Junjie Lin
  • Hua Zhang
  • Umer Shahzad

Abstract

Financial support is essential to reduce carbon emissions (CEs) and achieve the green transformation of China. To detect the nexus of local finance and CEs, we constructed a two-sector (clean and dirty sectors) model to identify the channels from city commercial banks (CCBs) to CEs involving capital scale, structure, and efficiency. Using the setting of CCBs as a quasi-natural experiment, we applied difference-in-differences (DID), instrument variable (IV), and spatial DID methods to test the effects of the construction of CCBs on CEs in China during 2003 to 2018. The construction of CCBs promoted CEs in cities by offsetting the technological effect and stimulating electricity consumption expansion (scale effect) and reindustrialization (structural effect). CCBs’ branches strengthened the promotion effect of CCBs’ construction on CEs, but the mergers of CCBs mitigated the effect. The effects varied across regions with different features (covering location, per capita income, financial development, environmental regulation, industrial and energy structure, carbon source, and so on). The construction of CCBs showed a spatial spillover effect, increasing the CEs of neighbors. Accordingly, suggestions were proposed to reduce CEs by optimizing CCBs management, policy making, and local carbon reduction efforts. JEL Classification: E44, G28, O16

Suggested Citation

  • Xiaoxiao Zhou & Junjie Lin & Hua Zhang & Umer Shahzad, 2025. "The Effects of Regional Banks on Carbon Emissions: A Quasi-Natural Experiment of City Commercial Banks in China," The Energy Journal, , vol. 46(3), pages 123-163, May.
    • Handle: RePEc:sae:enejou:v:46:y:2025:i:3:p:123-163
    DOI: 10.1177/01956574241280807
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/01956574241280807
    Download Restriction: no
    File URL: https://libkey.io/10.1177/01956574241280807?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    carbon emissions; city commercial banks; mixed effect; two-sector model; multidimensional heterogeneity;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    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:sae:enejou:v:46:y:2025:i:3:p:123-163. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: SAGE Publications (email available below). General contact details of provider: .

    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.