How does green fiscal expenditure promote green total factor energy efficiency? — Evidence from Chinese 254 cities

This paper explores how green fiscal expenditure affects Green Total Factor Energy Efficiency (GTFEE) from both non-spatial and spatial perspectives based on selected panel data of 254 cities in China. The results of the non-spatial panel model indicate that green fiscal expenditure has a significant positive impact on GTFEE. A comparative study of different econometric models shows that the main parts of the results are largely consistent, which indicates that the conclusions are robust. The spatial autocorrelation findings indicate a statistically significant presence of positive spatial spillover effects in the GTFEE of Chinese cities. Spatial Durbin Model (SDM) and Dynamic Spatial Durbin Model (DSDM) indicate that green fiscal expenditure has a similarly significant positive effect on GTFEE, which will increase over time. This paper considers different spatial weight matrices and changing measures to measure GTFEE, and the conclusions remain robust. Furthermore, industrial structure upgrading, and digital economy are vital in strengthening the relationship between local governments' green fiscal expenditure and GTFEE. According to heterogeneity analysis, green fiscal expenditure has a more significant effect on the GTFEE in mature resource-based cities and non-resource-based cities.