Green Finance,green Innovation And Green Total Factor Productivity

The Report on the Work of the Government in 2023 pointed out that in the future,we should still improve the system of ecological civilization,constantly improve the capacity for sustainable development,and improve green all factor production.The rapid development of China’s traditional economy comes at the cost of sacrificing the ecological environment.However,with the gradual destruction of the environment and the significant consumption of nonrenewable energy,it will ultimately backfire on economic growth.The past reliance on fossil energy consumption to boost the economy is now unsustainable,and the transformation of China’s traditional energy economy is imperative.Green total factor productivity(GTFP)is widely regarded as the most representative measure of national economic development.The Report on the Work of the Government points out that China’s ecological environment has improved significantly in the past five years,and the unit carbon dioxide emissions have decreased by 14.1%.The Chinese government is deeply implementing the strategy of sustainable economic development,promoting green development,calling for harmonious coexistence between humans and nature,continuously accelerating the pace of ecological civilization construction,and striving to fully play the role of various factors without damaging environmental quality and benefits,promoting the development of the economy towards green,healthy,and sustainable direction.The National Two Sessions once again proposed to improve the urban green finance system and promote green transformation.Therefore,the meeting called for further refinement of monetary policy tools,expansion of pilot cities,and promotion of green finance in the banking industry.On the one hand,because green finance will stimulate green innovation,green innovation will reduce the city’s unexpected output,improve green production efficiency and further improve the city’s green total factor productivity.This paper studies the impact of green finance on green total factor productivity through the green finance index,and further analyzes the mechanism of action with the help of the intermediary variable of green innovation.On the other hand,green total factor productivity will also affect green finance,so we also use policy effects to study the impact of green finance on urban green total factor productivity.In 2017,the government established five green finance reform and innovation pilot zones nationwide.The establishment of the pilot zone aims to support the development of green economy,improve the efficiency of green industries,alleviate environmental pollution,and guide the flow of green funds from the financial system into green production enterprises in pilot cities,thereby improving the allocation efficiency of green resources.The establishment of the green finance reform and innovation pilot zone not only promotes the green total factor productivity of pilot cities through direct effects,but also affects neighboring cities through spatial effects.Specifically,the siphon effect of pilot cities absorbs the factor resources of neighboring cities.In order to avoid being eliminated in market competition,neighboring city enterprises reduce pollution emissions through the competition effect,promote green production,and indirectly promote the improvement of green total factor productivity in neighboring cities.This paper selects the panel data of 421 prefecture level cities in China from 2000 to 2021 to conduct an empirical study to analyze the impact of green finance on urban green total factor productivity.The research conclusions are as follows: First,in the benchmark regression between urban green finance index and urban green total factor productivity,it is found that green finance can significantly improve the level of urban green total factor productivity,and the significance level of green finance is increased from 0.632% to 1.19%.Second,this paper takes green innovation as an intermediary variable,and empirically demonstrates that green finance will improve urban green total factor productivity by improving green innovation.The contribution rate of green innovation mesomeric effect is 2.5%.Third,the double difference model shows that the pilot policy of green finance reform and innovation can improve the green total factor productivity of cities.In order to solve the policy endogeneity problem,this paper also uses the PSM-DID empirical method,and the empirical results show that the green finance variable is significantly positive at the 5% level,which is consistent with the empirical results of the double difference model,which proves that the results are relatively stable.Fourth,the spatial spillover analysis based on the spatial Durbin model shows that the establishment of the green finance reform and innovation experimental zone has an obvious positive spatial spillover effect on improving urban green total factor productivity in the eastern region.The establishment of policies can promote the green total factor productivity of cities in the eastern and western regions,but the impact on the central region is not significant.According to the results of the policy space effect measured by the adjacency matrix,the establishment of the green finance reform and innovation experimental zone has directly increased the green total factor productivity of cities in the eastern region by 0.0118 and the green total factor productivity of other surrounding cities by 0.0296,and the results are significant at the 10% significance level,indicating the direct impact relative to the policy,The introduction of the policy of the green finance reform and innovation pilot zone will affect green total factor productivity in the eastern region more through intercity spillovers.Compared with the eastern region,the establishment of the green finance reform and innovation experimental zone has a greater direct impact on the pilot cities in the western region.Based on the empirical results,this paper puts forward the following policy recommendations:First,government departments should establish a sound green finance development system,improve the efficiency of financial capital utilization within the green finance development system,reasonably allocate and use resources,and ensure that green finance funds are earmarked for specific purposes.Secondly,the government formulates clear guidance plans for heavy polluting industries to stimulate green innovation among enterprises,and provides government subsidies to enterprises with actual technological innovation needs to motivate them to improve production efficiency.Third,the government departments should summarize the experience of the green finance reform and innovation pilot zone,make differentiated adjustment according to the region,and promote the policy of the green finance reform and innovation pilot zone in a larger scope.Fourth,cities that have not implemented the green finance reform and innovation experimental zone should actively strengthen exchanges and information sharing with cities in the eastern region that have implemented the green finance reform and innovation experimental zone,learn from the experience of cities in the eastern region that have implemented pilot policies,make full use of their own regional advantages and spillover effects,and improve the city’s green total factor productivity level.