The spatial spillover and threshold effect of green finance on environmental quality: evidence from China.

Green finance is a priority for alleviating environmental degradation pressures. Based on panel data of 30 provinces in China from 2009 to 2017, this study utilizes the spatial Durbin model (SDM) and the threshold model to examine the effect of green finance on environmental quality. The empirical results are as follows: (1) Green finance and environmental quality have significant positive spatial autocorrelation; the development of green finance in China is still in the lower-level range, while high-high and low-low are the dominant spatial clustering types. (2) Green finance has a significant positive effect on local environmental quality but has negative effects on that of its neighbors during the research period; however, the spatial spillover effect of green finance is heterogeneous in the three subsamples. (3) There are double threshold effects of green finance on environmental quality, and the effect decreases with the promotion of green finance. These empirical insights provide spatial references for policymakers to formulate strategies for the target of coordinated and integrated regional development.