Financial inclusion and green economic performance for energy efficiency finance

Abstract

Financial inclusion is fundamental for increasing the nation’s performance and green economy has emerged as one of the dominant factors to ecological sustainability, but how will these two factors connect? This research analyzes the correlation between the two in the case of China, which is undergoing a transformation to a green economy, using state-level statistics from 2008 to 2020 to evaluate the connection between financial inclusion and the green economy. By taking into account the fast-expanding technology banking system, as well as the application of the minimum distance to the weak efficient frontier framework (MinDw), a comprehensive assessment of financial inclusion is created, as is an assessment of green economic productivity. The findings show that the expansion of financial inclusion may contribute to increased green economic proficiency, which is primarily achieved via the tightening of credit restrictions on carbon emitting companies. The results have more consequences for the implementation of a financial development strategy and the maintenance of healthy associations between the state, banking institutions, and businesses.