The influencing mechanism of multi-factors on green investments: A hybrid analysis

Given the grimmer ecological environment, green investments have increased influence on the support and acceleration of the environmental improvement. To identify the driving forces of green investments, we examine the direct and spillover effects of political, economic and environmental factors using a hybrid analysis. The results are based on two sets of data, which includes text data (1339 environmental policies) from the official websites of provincial environmental protection departments and statistical data (434 valid samples) from the Chinese Statistical Yearbook (2003–2016). First, LDA topic model is employed to construct political factors, during which the optimal topic number N are determined as 3. As an evaluation index, the average F-score is up to 75.39% and three topics are categorized, namely environmental regulation and protection, pollution prevention and treatment as well as environmental public governance. Then, spatial econometric models are built to test the spatial characteristics of green investments and the spillover effects of the above three factors. The results show that the economic factors and environmental factors play more significant roles than political factors. However, regarding the development of green investments during 2003–2016 in Chinese provinces, the government has gradually strengthened its power in boosting green investments and improving the environment, especially in setting up and monitoring environmental regulation. Tests of policy time-lag effects and robustness are also carried out in order to confirm the validation of the model. The adjusted R2 of both tests are highly up to 0.905. Our results have significant implications to both research and practice in green investments and policy-making.