Research On The Similarities And Differences Of Green Finance Promoting Economic Development In Eastern And Western Regions

Since the reform and opening up,the economy has developed rapidly,but the development model still stays at the level of "development first,then governance",called extensive economy.Besides environmental resources are becoming increasingly hot topic.In order to solve environmental problems,the role of financial market in resource allocation can guide the flow of funds.On this basis,the concept of "green finance" has emerged.According to the definitions of green finance issued by the commissions,that is,economic activities that can support environmental improvement,respond to climate change,and use resources efficiently.The next step of green finance’s research on economic development is also on the agenda.Therefore,this paper,after collating the relevant theories of green finance and regional economic development,selects data from the eastern and western regions and constructs an analytical model for empirical research.This article explains the concept of green finance and analyzes its mechanism and related theories on regional economic development,then builds a PVAR model of the impact of green finance on economic development in the eastern and western regions.Select green loan,green investment and the second and the third industry increment as variables,then select the time series of 22 provinces’ data in the two regions to interpret and analyze.The results show that green finance has a positive lagging effect on the economic growth of the eastern and western regions.At the same time,the mechanism of green finance to economic development is that green credit affects green investment then transfer to transmits it to the economic development,and finally improves the second and the third industry increment.But the effects of two regions are not consistent.During the impulse response analysis,the results show that green finance has a continuous positive impact on the economic development of the east,and a short-term positive impact on the western region.At the same time,from the perspective of the effect,the efficiency in the east is significantly higher than that in the west.At last,in the process of variance decomposition,it is concluded that the level of economic development in the western region depends more on the green finance.At the end of this article,relevant suggestions are put forward based on the empirical results.Due to the differences between the eastern and western regions,it could be considering local conditions,improving the effectiveness of green finance implementation and increasing the supply of green finance,enriching the research and development of green financial products,enhancing government’s influence.This article will provide a reference for China’s future development of green finance.