Studies of Green Financial Performance System with Comparative Analysis of China’s Eight Economic Regions

Abstract

Green Finance directs funds to transfer to the green industries by providing environmental friendly financial services, to support technical development and creations, which plays an important role in improving ecological environment and promoting sustainable economic development. Besides, green finance, as an important part of the financial system, promote the formation of new financial products, can also help the sustainable development of financial sector itself. The purpose of this article is, by comparing the green financial implementation among China’s 28 provinces and directly affiliated municipalities and among the eight major economic regions, to research the comprehensive effects on the performance and efficiency of the financial sector by implementing the green financial policies. It also analyzes the decomposition factors that affect the green financial performance, as well as the sources that contribute to the green financial productivity growth. This paper adopts the traditional method of production efficiency analysis, using Malmquist productivity growth index to build the evaluation system on the overall result of the green financial implementation, for which it requires to set up the green financial distance function before the productivity index can be calculated. During the process, two-stage linear optimization programming methods are used to obtain the most reliable and best-fitted distance functions. As a result, technical progress serves as an important criterion to judge whether economic growth is sustainable, according to this study for nearly 10 years’ time period of sustainable development of China’s financial sector. It is confirmed that the sustainable development of the financial productivity also depends on the technological progress, after investigating its further sources, financial technological progress or total factor productivity (TFP) is more dependent on the management of labor inputs, while the scale effect of financial capital accumulation has minor impact.