Does green finance work for all? Evidence from resource-dependent cities in China

Abstract

Pilot zones for green finance reform and innovation constitute a pivotal institutional initiative for China to advance green economic transition. Nevertheless, whether their carbon abatement effects exhibit universal applicability or hinge on urban structural characteristics remains insufficiently verified by empirical evidence. This study constructs an unbalanced city-year panel dataset and adopts a triple Difference-in-Differences (DDD) framework to examine the policy's impacts on carbon emission intensity alongside its heterogeneous mechanisms, with three batches of national green finance reform pilot cities designated as the treatment group. Three core findings emerge. First, no statistically significant average emission reduction effect is detected across the full sample; this null result does not indicate policy ineffectiveness but arises from offsetting effects between resource-dependent and non-resource-dependent cities. Second, resource endowment acts as a critical moderating factor shaping policy outcomes. Cities with stronger economic fundamentals achieve more substantial carbon mitigation. Third, although regional business environment exerts a significantly negative direct impact on carbon emission intensity, a complete mediating chain whereby green finance policy reduces carbon emissions by improving business environments cannot be validated. This implies that the development of soft institutional environments has lagged behind the allocation of green financial capital. This paper identifies a structural feature that the carbon abatement dividends of green finance are concentrated in resource-dependent cities with high baseline carbon levels, furnishing empirical grounds for targeted policy expansion and institutional coordination.