How does green finance affect cleaner industrial production and end-of-pipe treatment performance? Evidence from China

Abstract

Effectively identifying the role and mechanism of green finance in environmental governance provides an important guarantee that green finance serves the ecological environment. Based on the panel data of 30 provinces in China from 2001 to 2015, this paper explores the impact of green finance on cleaner industrial production and end-ofpipe treatment and further reveals the mediating effect of industrial structure optimization and the moderating effect of environmental regulation. The results show that (1) China's cleaner industrial production performance, end-of-pipe treatment performance and systematic governance performance show a clear upwards trend, and the endof-pipe treatment performance was generally better than the cleaner production performance. (2) Green finance promotes cleaner production performance but inhibits end-of-pipe treatment performance. The optimization of industrial structure plays a partial intermediary role in the impact of green finance on cleaner production and end-of-pipe treatment. (3) Both "market-incentive" and "commandand-control" environmental regulations weaken the positive impact of green finance on cleaner production; "market-incentive" environmental regulation alleviates the negative impact of green finance on end-ofpipe treatment, while the moderating effect of "command-and-control" environmental regulation on end-of-pipe treatment is not significant.

Optimal Green Technology Choice for Firms under an Emission Trading Scheme: End-of-Pipe vs. Cleaner Production

“…Moreover, tax incentives seem to mostly foster cleaner production technologies, while subsidies are used to finance all types of eco-innovations [50]. Fang et al (2023) divided environmental governance into cleaner production performance and end-of-pipe treatment performance and then analyzed how green finance affects firms [23]. However, they still have not explored how firms choose green technology innovation.…”

“…Controlling pollution emissions cannot solve the problem at its core; green technology innovation is the fundamental approach and also an effective measure for firms to achieve long-term emissions-related cost reduction [20][21][22]. There has been a lot of research exploring the impact factors such as green finance, market incentive policies, and international technology spillover rates on green technology innovation [23][24][25][26][27]. Some studies also show that cloud computing technology and big data management algorithms can promote green finance and promote green technology innovation in firms [28][29][30].…”

Emerging new themes in green finance: a systematic literature review

“…Researchers have studied how these restrictions affect green finance's impact on technology. Studying how financial policies and regulatory frameworks interact has helped explain the complex dynamics affecting innovation in environmentally sensitive industries [11,29,54,84,120,126,132,151,152,174].…”

Green Finance Advancement and Its Impact on Urban Haze Pollution in China: Evidence from 283 Cities

“…Furthermore, Fei et al [7] found an inverted U-shaped relationship between urban innovation efficiency and haze pollution, but currently, China's urban innovation efficiency has not reached a turning point. In addition, existing research has found that foreign direct investment [8], digital finance [9], manufacturing agglomeration [10], and urban density [11,12], as well as new urbanization construction [13], digital development, environmental regulation, technological innovation, and an advanced industrial structure are all beneficial for improving haze pollution [14,15]. Some scholars also believe that investing in environmentally friendly transportation infrastructure, levying reasonable environmental taxes, establishing an environmental negotiation system with the Ministry of Ecology and Environment, and expanding local government environmental expenditure can also promote the governance of haze pollution [16][17][18].…”