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Panel study reveals higher green entrepreneurial entry with expanding green finance in Chinese cities, highlighting the catalytic role of industrial and educational endowments.
Green finance is an important policy tool for advancing green development in China, while new green-firm entry is an integral part of this transition. Using data from 278 Chinese prefecture-level cities from 2015 to 2023, this study measures the level of green finance development and examines its relationship with green entrepreneurial entry intensity. The empirical results show that green finance is significantly associated with higher green entrepreneurial entry intensity, and this finding remains robust across a series of robustness checks. The mechanism analysis suggests that green technological innovation and the external financing environment are two important channels linking green finance to green entrepreneurial entry. The heterogeneity analysis shows that this positive relationship is stronger in old industrial-base cities and in cities with stronger science and education endowments. The positive relationship also remains robust after accounting for spatial dependence across cities. This study provides empirical evidence on the role of green finance in new green-firm entry and offers useful implications for local governments seeking to develop more targeted green finance and entrepreneurship policies.
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Wang et al. (2026) studied this question.
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