Does China’s regional green finance reform drive low-carbon transition? A spatial spillovers perspective

This study examines the impact of China’s regional green finance reform on low-carbon transition using a spatial Difference-in-Differences approach. Based on panel data from 262 cities (2007–2022), we find that green finance reform significantly improves low-carbon transition efficiency in Green Finance Reform and Innovation Pilot Zones but generate negative spillovers in neighbouring non-pilot areas. Heterogeneity analysis reveals that only Guangzhou experiences a strong and positive direct policy effect, due to its advanced economic foundation and a higher proportion of tertiary industry. In contrast, pilot zones exhibiting weak or insignificant direct policy effects are located in less developed areas (e.g. Guiyang, Nanchang), or in resource-dependent regions dominated by energy-intensive industries (e.g. Huzhou, Quzhou, Karamay, Lanzhou). Our findings provide empirical evidence for policymakers to refine green finance strategies, optimize policy coverage, and mitigate regional disparities in low-carbon development.