How green finance drives energy transition – an analysis from structural and efficiency transition perspectives

Purpose This study explored the impact of green finance (GF) on energy transition. We believe that this study makes a significant contribution to the literature because it constructed double fixed effects model, revealing this impact in terms of both energy structure transition (EST) and energy efficiency transition (EET). Specifically, the nonlinear effect of environmental regulation (ER) on energy transition is investigated by the panel smooth transition model. Next, the spatial Durbin model reveals the impact of GF on energy transition. The robustness test ensures the robustness and reliability of the empirical results. Design/methodology/approach This paper contains the benchmark regression model, the panel smoothing transition model, the spatial Durbin model. Descriptive statistical analysis, benchmark regression, analysis of regional heterogeneity, nonlinear effects of environmental regulation, spatial effects analysis, robustness tests and endogeneity analysis. Findings Green finance (GF) can promote energy transition in both energy structure and energy efficiency. The effect of GF on energy structure transition (EST) and energy efficiency transition (EET) exhibit regional heterogeneity. The nonlinear effect of environmental regulation (ER) on energy transition is investigated. It is found that the effect of GF on EST is “U”-shaped, and the corresponding threshold value are put forward. The inter-provincial coordination in advancing green finance policies can more efficiently drive comprehensive regional energy transition. Originality/value The effect of GF on EST can significantly promote EST in resource-based regions, while the one on EET is most pronounced in central and non-resource-based regions. The effect of GF on EST is shaped by the effect on EET, which has a smooth transition. The threshold values of ER are found. Local GF will have a spillover effect and affect the energy transition of neighboring provinces. The above findings can provide theoretical support for the national innovation-driven development strategy.