Reserch On Mechanism Of Finance Supporting Regional Green Development

China’s economy has been developing rapidly at the cost of tremendous energyconsumption and severe environmental pollution since1980s. The severe haze andfog often shrouding many cities in China since2013indicate that there is an urgentneed to shift current developmental pattern to green development. As one of the coresof modern economy, finance could play a more active role to promote the transition.Yet how to advance the transition exatly remains unclear and arguable. And it needs toexplore deeply the ways that finance factors work on improving the level of regionnalgreen development before policy making.This paper believes finance influncing green development through fourmechanisms as capital supporting, capital distribution, enterprise supervision andgreen finance. With data of30provinces in China from2001to2011, we measure thelevel of regional green development with eco-efficiency, and utilize spatial Durbinmodel and Arcgis to research relative importance of the mechanisms and effect ofspatial spillover in China. The main findings are: effects of enterprise supervision andresource distribution are relatively more important. The former has the most positiveinfluence on local green development, yet its spatial spillover effect only works in thelong term. The latter influences local green development significantly, yet the spatialspillover effect is not significant. After the financial crisis, the effects of capitalsupport and the supervision from long-term loan are strengthened than those before,yet the supervision from security market is weakened and leads to negative influenceon the eco-efficiency. The direct effects and spatial spillover effects of green financespillover are not significant, which implies the necessary of enhancing the support offinance for green industry and environment protection. The point of policy is thatmore emphasis should be paid to the supervision of capital use instead of increasinginvestment.Combining the theoretical and empirical analysis, this paper give some adviceson finance supporting green development, such as enforcing the supervision ofenterprise’s capital use that financied from financial institution, enhancing theefficiency of capital distribution of financial market, investmenting more money toenvironment protecting, supporting techenology research and revolution, speeding to build up trading places for pollution rights.