Green Finance and Urban–Rural Integration in China: Nonlinear Associations and Spatial Spillovers

Narrowing urban–rural disparities and advancing the green transition are two key imperatives for sustainable development, yet the relationship between green finance and urban–rural integration remains insufficiently examined. Using panel data for 30 Chinese provinces from 2013 to 2022, this study investigates how green finance is related to urban–rural integration, with particular attention to nonlinear patterns, institutional conditions, and spatial dependence. The results show a positive association between green finance and urban–rural integration. This result remains stable across alternative specifications and various sensitivity checks, including lagged specifications, the Oster bounds test, and placebo tests. Panel threshold models show stronger evidence of nonlinear heterogeneity for innovation capability, while the rationalization of industrial structure threshold provides only suggestive evidence. Interaction models indicate that the interaction terms involving intellectual property protection intensity and marketization level are positive and statistically significant. Estimates from the spatial Durbin model further show that green finance is associated with significant positive net spatial spillovers across neighboring regions, with the model-based indirect effect exceeding the direct effect as a net spatial association after accounting for negative conditional spatial dependence in urban–rural integration. Overall, this suggests that green finance is relevant not only to environmental objectives but also to coordinated and sustainable urban–rural development, with implications for SDGs 10 and 11.