Can green finance effectively mitigate PM2.5 pollution? What role will green technological innovation play?

This study employs panel data encompassing a time frame from 2012 to 2020, collected from 30 provinces in China. By employing a geographic Durbin model and introducing green technological innovation as an intermediary variable, the study explores the relationship between green funds and PM2.5 levels on a spatial scale. The research takes a spatial perspective to explore the links between green finance and PM2.5 emissions, with a specific focus on the intermediary role played by green technology innovation. The findings offer comprehensive insights into enhancing air quality in China, promoting the country's transition towards sustainability, improving the overall human living environment, and generating novel ideas for tackling air pollution challenges. The findings of this study are as follows: (1) The progress of green finance proves to be an effective means of reducing local PM2.5 emissions. Additionally, it generates spillover effects on neighboring regions, promoting the growth of green finance and consequently leading to a decrease in PM2.5 emissions in adjacent areas. (2) In the study exploring the relationship between green financing and PM2.5, green technological innovation plays a crucial mediating role. By efficiently allocating financial resources during China's pivotal green revolution phase, green finance offers funding support to enterprises for the advancement of green technology. This, in turn, contributes to the reduction of PM2.5 emissions. As a consequence, this leads to a decline in energy consumption, pollution emissions, and PM2.5 levels. Additionally, with the continuous improvement in green technological innovation, the reverse effect between green finance and PM2.5 is becoming stronger and stronger. (3) The relationship between the two has obvious regional heterogeneity between the north and south regions of China.