The impact of green finance on industrial pollution emissions: Empirical evidence from economic and environmental perspectives

Green finance can make full use of financial instruments to control industrial pollution emissions, thus becoming an important initiative to balance ecological environment and economic growth. Based on panel data from 30 Chinese provinces, this study adopts a fixed effect model to test the impact of green finance on industrial pollution emissions, followed by the application of instrumental variables, a GMM dynamic panel, and exogenous shock tests to ensure the robustness of the benchmark results. The results indicate that green finance is capable of controlling the total amount and intensity of industrial pollution emissions, that is to say, to realize the "double control" of industrial pollution emissions, taking into account economic growth and environmental protection. The mediating effect model concludes that green finance can influence industrial pollution emissions through green technology innovation and industrial structure upgrading, but the impact of these two mechanisms on the total amount and intensity of industrial pollution emissions has its own focus. Heterogeneity analysis shows that green finance is more significant in reducing the intensity of industrial pollution emissions in resource-general areas and areas with high levels of information technology, and the shift from controlling the total amount indicator to the intensity indicator implies that green finance is more effective in promoting economic growth while protecting the environment. Our empirical findings offer important policy implications for reducing industrial pollution emissions from both economic and environmental perspectives.