Can the Greening of Financial Markets Be Transmitted to the Real Economy as Desired in China?

• Published in: Systems (Basel) Vol. 11; no. 3; p. 161
• Main Authors: Zhang, Jingxian, Ding, Xuhui, Bao, Lingyan, Zhang, Yidi
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.03.2023
• Subjects: Carbon; Clean technology; Climate change; Collateral; Credit policy; Debt financing; differences-in-differences model; Economic aspects; Economic development; Economic growth; Efficiency; Emissions; Environmental protection; Finance; Financial markets; Financial services industry; Financing; Fuzzy sets; Green building (Construction); Green buildings; green credit; Green design; green investment; Green market; greening of financial markets; Innovations; Insurance; Pollution; Principal components analysis; Securities markets; Socially responsible investments; Statistical analysis; Sustainable development; Sustainable living; the real economy; China
• ISSN: 2079-8954; 2079-8954
• DOI: 10.3390/systems11030161

The greening of financial markets can effectively guide the flow of capital to green and environmental industries, prompt the upgrading and transformation of the green industry, and help China achieve its dual carbon goals. This paper adopts China’s inter-provincial panel data from 2011 to 2020, measures the development level of the real economy in terms of innovation, coordination, green, openness, and sharing using principal component analysis, and selects core indicators such as green credit, green insurance, green investment, and financial market size. In addition, the fixed panel model and differences-in-differences model are used to carry out the research. The results show that: 1. China’s high-quality green development shows an upward trend in general, the real economy tends to be green, and the development in the east, middle, and west is gradually balanced; 2. Green credit and green insurance have a significant inhibitory effect on the development of the real economy, and this inhibitory effect is more evident in the middle and western regions; green investment has a significant positive promotion effect on promoting the development of the real economy; 3. The promulgation and implementation of policies such as the Guidance on Building a Green Financial System can significantly promote the greening of the financial market to the real economy and promote sustainable development. It should continue to promote the greening of the financial market, improve the green financial service system, smooth the transformation path of green finance to the real economy, strengthen the green guidance of the government on the development of the virtual and real economy, promote the green synergistic development of the financial market in the east and west, and promote the high-quality green sustainable development of the region.