Panel data analysis shows green finance may promote PM2.5 emissions in Chinese cities, indicating potential greenwashing effects.
Considering the call for "pollution and emission reduction" of China, it’s of great significance to explore whether the development of sustainable finance contributes to the improvement of ecological and environmental quality is of great significance. Therefore, based on the panel data of 244 prefecture-level cities in China from 2016 to 2023, this paper uses a two-way fixed effects model (TFE) to empirically examine the influence of green financial development on fine particulate matter (PM2.5) emissions. The research results show that the development of green finance has a promoting effect on PM2.5 emissions, indicating a greenwashing phenomenon. This promoting effect remained robust after a set of robustness tests. Heterogeneity analysis shows that the effect of green finance is more evident in less developed regions and central regions.
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Wu et al. (2025) studied this question.
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