Spatial spillover effect of Green Finance and Clean Energy on China's Provincial Green Economic Development

Green finance is a new financing mode that pays attention to environmental benefits. Achieving a balance between the economy and the environment requires clean energy. For formulating policies to achieve sustainable development goals, it is very important to explore whether integrating green finance and clean energy is conducive to promoting green economic development (GED). This study applies a non-radial directional distance function (NDDF) to assess China's provincial GED using panel data from 2007 to 2020. It adopts the spatial Durbin model to empirically analyze the spatial spillover effects of green finance and clean energy on GED. The results indicate that: 1) The influence of green finance on GED shows a "U" curve relationship of first suppression and then rise. 2) A 1% increase in the synergy between green finance and clean energy yields a 0.1712% raise in the local GED and a 0.3482% boost to the surrounding area's GED through spatial spillovers. 3) The integration of green credit and clean energy has an apparent spatial spillover effect, and the interaction between green securities and clean energy can promote local GED. This study suggests that the government should accelerate and improve the development of a green financial market and establish a long-term linkage and co-ordination mechanism for the promotion of GED. It is crucial that financial institutions allocate more resources to clean energy development, and all regions will have to utilize the spatial spillover effect of clean energy to facilitate China's economic transformation and development in theory and practice.