Does green finance agglomeration improve carbon emission performance in China? A perspective of spatial spillover

Promoting the synergies between economic growth and carbon reduction is crucial for achieving carbon neutrality goals. Understanding the determinants of carbon emission performance (COP) is important for improvement. However, empirical examinations of the linkages between green finance agglomeration (GFA) and COP remain limited. Utilizing a panel data of 30 Chinese provinces from 2007 to 2019, we measure COP via meta-frontier data envelopment analysis. We employ a spatial Durbin model (SDM) to investigate the spatial spillover effects of GFA on COP. Our findings reveal COP has a substantial positive spatial correlation between provinces. We further observe that GFA has a direct and spatially dependent impact on regional COP. The effects vary based on different green finance instruments and regions. GFA enhances COP through capital formation, energy transition, and technological advancement, although asymmetry effects exist between local and neighboring regions. Promoting regional GFA formation through interprovincial cooperation and coordination for optimizing green finance allocation is vital. Moreover, increased financial support towards green, low-carbon projects and enterprises can raise overall regional COP.