Work

Green Value from Technology Finance Policies Towards Sustainability: Evidence of a Quasi-Natural Experiment on Urban Carbon Reduction in China

Year: 2025

Type: article

Abstract: Innovation can balance environmental objectives while enhancing economic efficiency. However, its policy dimension has largely been overlooked. Leveraging financial instruments to promote technological innovation has become a primary policy tool. This study treats China’s pilot policies on technology finance integration as a quasi-natural experiment and constructs a multi-period difference-in-differences model with 5434 panel datapoints from 286 cities between 2005 and 2023. Within the environmental Kuznets curve theoretical framework, we examine the impact of technology finance policies on urban carbon emissions. The findings reveal that these policies significantly curb urban carbon emissions. Heterogeneity analysis shows stronger effects in large, non-resource-dependent eastern cities than in others. Mechanism tests indicate that these policies primarily generate green value through technological innovation and industrial structure upgrading, with the latter demonstrating a significantly stronger effect than the former. Our findings regarding the outstanding role of industrial structure upgrading may challenge and reorient the literature’s general focus on green technologies. This study employs economic principles to offer new insights into innovation’s effective balancing of economic growth and sustainability, broadening discussions about the green value of financial policy tools.

Source: Sustainability

DOI: 10.3390/su17188437

Authors: Jiaji An, Hongyuan Bi, He Di, Jingze Lin, Xinran Zhao

Institutions: Jilin University of Finance and Economics, North China Electric Power University, Jilin University

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Industry, innovation and infrastructure, Sustainable cities and communities, Responsible consumption and production

Open Access status: gold

Estimated APC paid: $2,896