Research On The Impact Of Regional Financial Development On Environmental Pollution

Over the past 40 years of reform and opening up,China's economy has developed gradually,people's living standards have been improved,and international influence of China has been growing.However,the ecological environment of various regions in China has suffered from serious pollution.Environmental deterioration not only threatens the health of residents,but also hinders the sustainable growth of regional economy.How to deal with the increasingly serious environmental pollution problem and seek a green,environmental protection,conservation and sustainable development style has become an important issue for our country.As a booster of economic development,the impact of regional financial development on the ecological environment has attracted wide attention of scholars all over the world.Nevertheless,the domestic research on the influencing factors of environmental pollution started relatively late,and mostly focus on the Environmental Kuznets Curve(EKC)hypothesis,ignored the ecological role of financial development.It is of great theoretical and practical significance to study the impact of financial development on environmental pollution and to promote technological innovation of resource-saving and eco-environmental protection and the development of green and circular economy by means of financial means.Therefore,this paper discusses the impact of regional financial development on environmental pollution from both qualitative and quantitative perspectives,and discusses the relevant measures to curb environmental pollution from the perspective of financial development.Firstly,this paper reviews the research results of the relationship between financial development and environmental pollution,comparing their similarities and differences.It turns out that the research results of foreign scholars are relatively rich,and mostly from the quantitative perspective with the help of econometric models.However,domestic scholars started late on the research of financial development and environmental pollution,and mostly analyzed the path of financial development to environmental pollution from a qualitative perspective.Secondly,this paperintroduces the theoretical basis of domestic and foreign scholars on the impact of financial development on environmental pollution,including the theory of EKC,financial development theory and environmental finance theory.Based on these theory and endogenous economic growth model,this paper regards economic growth as a bridge between financial development and environmental pollution,and analyses how financial development affects environmental pollution by changing the mode of economic growth and improving the level of technological innovation from a non-linear perspective.According to the analysis results,we find that the financial development has differential impacts on environmental pollution in different regions,and financial development can play an indirect role in environmental pollution through two main ways: scale effect and technology effect.On the basis of measuring the degree of environmental pollution in China's provinces,a panel smooth transformation regression model(PSTR)is established to explore the non-linear impact of financial development on environmental pollution.At the same time,the intersection of financial development,economic growth and technological innovation is introduced into the static panel model to explore the scale effect and technological effect of financial development on environmental pollution.It is found that the scale effect of financial development will lead to deterioration of regional ecological environment,but it can reduce the degree of environmental pollution through technological effect.There is no inverted U-shaped relationship between economic growth and environmental pollution.The promotion of industrialization and urbanization aggravates environmental pollution.In addition,in order to ensure the robustness of the research results,the panel threshold model,the two-stage least squares method and the method of variable replacement are used to test the robustness of the empirical results from three aspects: model setting,regression method and variable selection.Based on the empirical results,this study offers relevant suggestions on how to promote China's economic growth and curb environmental pollution.Firstly,from the perspective of government and financial institutions,it is necessary to increase the financing support for green environmental protection industry,especially the localemerging enterprises that are resource-saving,in line with the concept of economic sustainability and scientific development.On the other hand,it is necessary to strengthen the financial review of polluting industrial enterprises,coordinate regional development planning,construct the platform of ecological environment information sharing and support the policy system of green financial development.It is important to provide a better development environment for the emerging green environmental protection industry by institutional measures.Secondly,from the perspective of scale effect and technology effect of financial development,we need to encourage and support the market-oriented concept of green financial development,and pay more attention to the assessment of ecological environment quality.Financial measures should be used to increase the inclination in resource allocation,financing convenience and policy support,such as price subsidies for environmentally friendly enterprises and tax relief.