Green financing strategy for low-carbon economy: The role of high-technology imports and institutional strengths in China

Extreme environmental events surging across the globe are the consequences of the human's race for attaining rapid economic growth driven by cheap energy sources. However, the consequences of such achievements are far beyond the benefits of the growth which severely affect environmental quality resulting in the rise of average global temperature, and various factors linked with changing climate. The current analysis takes into account a panel of Chinese provincial data from 2000 to 2020 to empirically examine the impact and the magnitude of GDP, renewable energy, imports of high technology, green financing strategies, and quality of institutions on the provincial emissions of carbon in China. The panel is tested for several diagnostic tests and a long-run cointegrating connection is confirmed among the factors under examination. The advanced technique of Method of Moment Quantiles Regression (MMQREG) confirms that GDP is detrimental, whereas, renewable energy, green finance, import of high technology, and institutional quality depict heterogenous impacts on carbon emissions. Furthermore, the robustness check of the Augmented Mean Group, Fully-Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) validates and supports the earlier findings of MMQREG. Based on the outcomes it is revealed that except for the GDP, the explanatory factors effectively cut provincial carbon emissions in China, nevertheless, the magnitude of the green financing strategies raised a valid question which depicts a decreasing trend across the quantiles. According to the findings, it is proposed that the country should first prioritize green and sustainable finance and upgrade the domestic industrial technology with the help of import of high-technology that will relive burden on the environmental quality. Secondly, quality institutions will play an important role in coordination among various green financial institutes that will further maximize the gain from deployment of renewable energy sources.