Green Finance Policies and Urban Carbon Emission Efficiency：New Evidence from the Synthetic Difference - in - Differences Model

Green finance is pivotal in advancing the green and low-carbon transformation of economic systems. This study utilizes a balanced panel dataset comprising 279 cities in China from 2006 to 2022. It focuses on the establishment of green finance reform and innovation pilot zones, starting in 2017, as a quasi-natural experiment. The research employs the Synthetic Difference-in-Differences (SDID) model to assess the policy's impact on urban carbon emission efficiency and the mechanisms driving these effects. The findings reveal that the introduction of the green finance reform and innovation pilot zones has led to a significant improvement in urban carbon emission efficiency. This policy effect is primarily driven by innovations in green technology and improvements in energy efficiency. The heterogeneity analysis indicates that the policy is particularly effective in cities located within national urban agglomeration zones, large cities, and those that are not resource-based. Further investigation also shows that the green finance reform has contributed to a reduction in per capita carbon emissions, with a notable negative spatial spillover effect on urban carbon emission efficiency. This study not only enhances the analytical framework for evaluating the carbon reduction impacts of green finance policies but also provides empirical support for the further development of green finance and the cultivation of new drivers for a low-carbon economic transition.