Areeba Minal , Nida Imtiaz Banking and Finance(B)

21821554-027 , 21821554-027 Assingment-01

Establishment of green finance reform and innovation pilot zones improved air
quality? Evidence from china
The green finance promote industrial upgrades and new innovations in china that’s improved urban air
quality from 2015-2019. Green finance promote these facility especially in south areas and large cities.

Introduction
When china starts its economic reforms, it has seen significant growth but this cause of major
environmental issues like air pollution and greenhouse emissions. In this case the government of China
has introduced green finance to balance the economic development and protection of environment.

Literature review and research hypotheses

The literature review prove that the economic and government related factors cause of air pollution
and it is a significant issue Green finance aims to promote eco-friendly investments for reducing
pollution from industries to improve air quality. The establishment of Green Finance Reform and
Innovation (GFRI) zone of pilot in China has positive impact on the quality of environment by improving
the green innovation and responsible corporate behavior.

The hypothesis regarding the impact of the GFRI pilot zones on quality of air. GFRI can enhance the
quality of air quality by improve the regulations of environment, upgrade the structure of industries
and promote the green innovation in various sectors

Data and methodology

In study examine the impact of the establishment of GFRIs pilot zones in 146 prefecture level cities in
china on the quality of air from January 2015 to December 2019. The china city statistical yearbook and
the China online monitoring and analysis platform, they analyzed by using difference-in-difference DID
method. The south cities and large cities take more benefits from GFRIs as compare to north and small
cities. Those cities that have initial quality of air, better development of finance and lower expenditures
of fiscal levels saw more improvements. GFRIs promote the air quality improvements not just directly,
but also improve the industrial structure and green innovation. However, the green finance policy is
better for environmental improvements.

Conclusion and policy implications

The impact of GFRI on urban air quality by using the quasi-natural experiment and DID model. GFRI
improve the quality of air by upgrade the industrial structure and green innovation. Stronger impact on
south cities and financial developed areas. GFRIs expand their approaches in local areas.