Does green finance boost carbon–neutral performance? Evidence from China.

Carbon neutrality has attracted widespread attention as a key strategy for mitigating environmental degradation, but there is little research on whether the development of green finance can contribute to the process of carbon neutrality. This paper proposes a hypothesis based on the relationship between green finance and carbon–neutral performance and empirically tests it using a spatial Durbin model and combining it with a threshold panel model utilizing Chinese provincial sample data from 2011 to 2021. The study found that (1) green finance development would promote carbon–neutral performance; (2) there are notable spatial characteristics of green finance and carbon neutrality performance, with local green finance impacts both local and neighboring carbon–neutral performance; and (3) green finance impacts carbon–neutral performance at a single threshold and different levels of green finance development affect carbon–neutral performance differently. In the eastern, central, and western regions, the contribution of green finance to carbon–neutral performance gradually decreases. Thus, Chinese authorities should strengthen the green sustainable financing system, promote regional green finance, and enhance the carbon–neutral performance of green finance. [ABSTRACT FROM AUTHOR]