The Measurement of Green Finance Development Index and Its Poverty Reduction Effect: Dynamic Panel Analysis Based on Improved Entropy Method

Abstract

Finance contributes to poverty alleviation through economic growth, and the development of green finance is related to the sustainable development of the world economy and environment. Green finance not only helps promote sustainable economic development but also helps reduce poverty. Based on the analysis of related theories about green finance and poverty alleviation, this paper selects 18 indicators from three dimensions of economic development, financial development, and social environmental development and uses the improved entropy method to measure the green finance development index of China’s 25 provinces and municipalities from 2004 to 2017. The results show that the development level of green finance in China’s 25 provinces and municipalities is quite different. On the basis of the above analysis, make an empirical analysis of the impact of the green finance development index on poverty alleviation using multiple regression analysis and static panel and dynamic panel estimation methods. The research results show that there is a significant positive correlation between green finance and poverty alleviation; the higher the level of green finance development, the more conducive the poverty alleviation. So, this paper suggests that poverty can be better alleviated by improving the level of green finance development, financial asset level, and economic development level.

Does Environmental Policy Promote Energy Efficiency? Evidence From China in the Context of Developing Green Finance

“…However, the measurement of green finance by using a single variable cannot comprehensively reflect the overall level of green finance development. Based on Jiang et al (2020), the index of China's provincial green finance development is measured from four dimensions, namely, green credit, green investment, green insurance, and government support, and Table 2 reports specific indicators. After standardizing the indicator data, the Entropy Weight Method is used to calculate the weight of each indicator, so as to calculate the provincial annual green development index.…”

Coupling Coordination and Spatiotemporal Dynamic Evolution Between Green Urbanization and Green Finance: A Case Study in China

“…Green finance instruments consist of various products and mechanisms, including green credit, green security, green insurance, green investment, carbon finance, etc. (Zeng et al, 2014;Zhang et al, 2019;Liu et al, 2020). However, green finance in China is still in the developmental stage, with a lack of relevant statistics.…”

“…Zhu et al used green investment to represent green finance and investigated the relationship between circular economy and green finance in Guizhou (Zhu et al, 2019). Zeng et al (2014) constructed a comprehensive index system of green finance from the aspects of green credit, green securities, green insurance, green investment, and carbon finance. Liu et al evaluated the level of coupling coordination between green finance and green economy (Liu et al, 2020).…”

Can Green Finance Optimize Energy Structure: A Spatial Econometric Analysis based on China's Traditional and Renewable Energy Consumption

“…At the same time, the development of green finance can reduce risk and improve the return rate of green energy. In contrast to Jiang, et al (2020), who use the entropy weight method to measure the GFI, this paper uses the method of annual measurement to calculate it. Because the GFI measured by entropy weight method is a relative index, this paper adopts the method of annual measurement to make the measurement result not time comparable.…”

“…Improved entropy weight methodWhen measuring the development index of China's green finance, this paper selects the improved entropy weight method based on the research of Jin (2017),Lei and Qiu (2016),Min (2019), Weiwei (2018), and Jiang et al (2020.…”