How does industrial structure transformation affect carbon emissions in China: the moderating effect of financial development

Given China’s rapid industrial upgrade and economic development process, this study tries to explore the effect of industrial structure transformation on carbon emissions in China and the moderating effect of financial development by employing the traditional OLS model, the dynamic SYS-GMM model, and the dynamic spatial lag model comprehensively. In particular, industrial structure transformation has been divided into two indicators including industrial structure rationalization and industrial structure optimization; carbon emissions are evaluated from the dual perspective of scale and average. The empirical results indicate that only industrial structure optimization has a negative impact on carbon emissions scale in China at the national level. In addition, financial development has merely and positively moderated the nexus between industrial structure rationalization and carbon emissions scale and per capital carbon emission in the southern regions of China, which highlights the establishment of regional heterogeneity and the necessity of formulating policy in line with local conditions. Both theoretical and practical significance have drawn from this study, for the emerging economics and in particular for China, to reduce carbon emissions through industrial structure transformation and financial development and promote high-quality development in the new era.