Green Finance and Low-Carbon Economic Development: Moderating Roles of Green Technology Innovation and Government Intervention in China

Mengdie Zhang

doi:10.62762/JSSPA.2026.563767

Volume 3, Issue 2, Journal of Social Systems and Policy Analysis

Volume 3, Issue 2, 2026

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Journal of Social Systems and Policy Analysis, Volume 3, Issue 2, 2026: 55-68

Open Access | Research Article | 04 March 2026

Green Finance and Low-Carbon Economic Development: Moderating Roles of Green Technology Innovation and Government Intervention in China

Mengdie Zhang 1 *

1 School of Economics, Sichuan University of Science and Engineering, Zigong 643000, China

* Corresponding Author: Mengdie Zhang, [email protected]

DOI: 10.62762/JSSPA.2026.563767

ARK: ark:/57805/jsspa.2026.563767

Received: 19 January 2026, Accepted: 07 February 2026, Published: 04 March 2026

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Abstract

Using balanced panel data for 30 Chinese provinces from 2005 to 2022, this study investigates the impact of green finance (GF) on low-carbon economic development (LCE), with particular attention to the moderating roles of green technology innovation (GTI) and government intervention intensity (GII). A two-way fixed effects model is employed to control for regional heterogeneity and time effects. The results show that GF significantly promotes LCE. Moreover, GTI strengthens the positive effect of GF on LCE, whereas GII weakens this relationship, indicating that excessive government intervention may reduce the effectiveness of GF in supporting low-carbon development. These findings remain robust across alternative specifications and measurements, and provide policy implications for improving green financial systems and advancing low-carbon transitions in emerging economies.

Graphical Abstract

Keywords

green finance

low-carbon economic development

green technology innovation

government intervention

Data Availability Statement

Data will be made available on request.

Funding

This work was supported in part by the Chengdu Philosophy and Social Sciences Research Center and the Chengdu Green and Low-Carbon Development Research Center under Grant LD202521; in part by the Sichuan Provincial Key Laboratory of Philosophy and Social Sciences for Digital Analysis and Intelligent Decision-Making in Urban–Rural Industrial Integration Development (Project on the Measurement, Evaluation, and Mechanisms of Urban–Rural Industrial Integration in Southern Sichuan under Digital Economy Empowerment) under Grant CXCYRH25B-23; and in part by the Sichuan University of Science and Engineering Talent Introduction Project (Research on the Mechanisms and Pathways of Technological Innovation’s Impact on High-Quality Economic Development under the “Dual Carbon” Goals) under Grant 2023RC17.

Conflicts of Interest

The authors declare no conflicts of interest.

AI Use Statement

The authors declare that no generative AI was used in the preparation of this manuscript.

Ethical Approval and Consent to Participate

Not applicable.

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APA Style

Zhang, M. (2026). Green Finance and Low-Carbon Economic Development: Moderating Roles of Green Technology Innovation and Government Intervention in China. Journal of Social Systems and Policy Analysis, 3(2), 55–68. https://doi.org/10.62762/JSSPA.2026.563767

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TY  - JOUR
AU  - Zhang, Mengdie
PY  - 2026
DA  - 2026/03/04
TI  - Green Finance and Low-Carbon Economic Development: Moderating Roles of Green Technology Innovation and Government Intervention in China
JO  - Journal of Social Systems and Policy Analysis
T2  - Journal of Social Systems and Policy Analysis
JF  - Journal of Social Systems and Policy Analysis
VL  - 3
IS  - 2
SP  - 55
EP  - 68
DO  - 10.62762/JSSPA.2026.563767
UR  - https://www.icck.org/article/abs/JSSPA.2026.563767
KW  - green finance
KW  - low-carbon economic development
KW  - green technology innovation
KW  - government intervention
AB  - Using balanced panel data for 30 Chinese provinces from 2005 to 2022, this study investigates the impact of green finance (GF) on low-carbon economic development (LCE), with particular attention to the moderating roles of green technology innovation (GTI) and government intervention intensity (GII). A two-way fixed effects model is employed to control for regional heterogeneity and time effects. The results show that GF significantly promotes LCE. Moreover, GTI strengthens the positive effect of GF on LCE, whereas GII weakens this relationship, indicating that excessive government intervention may reduce the effectiveness of GF in supporting low-carbon development. These findings remain robust across alternative specifications and measurements, and provide policy implications for improving green financial systems and advancing low-carbon transitions in emerging economies.
SN  - 3068-5540
PB  - Institute of Central Computation and Knowledge
LA  - English
ER  -

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@article{Zhang2026Green,
  author = {Mengdie Zhang},
  title = {Green Finance and Low-Carbon Economic Development: Moderating Roles of Green Technology Innovation and Government Intervention in China},
  journal = {Journal of Social Systems and Policy Analysis},
  year = {2026},
  volume = {3},
  number = {2},
  pages = {55-68},
  doi = {10.62762/JSSPA.2026.563767},
  url = {https://www.icck.org/article/abs/JSSPA.2026.563767},
  abstract = {Using balanced panel data for 30 Chinese provinces from 2005 to 2022, this study investigates the impact of green finance (GF) on low-carbon economic development (LCE), with particular attention to the moderating roles of green technology innovation (GTI) and government intervention intensity (GII). A two-way fixed effects model is employed to control for regional heterogeneity and time effects. The results show that GF significantly promotes LCE. Moreover, GTI strengthens the positive effect of GF on LCE, whereas GII weakens this relationship, indicating that excessive government intervention may reduce the effectiveness of GF in supporting low-carbon development. These findings remain robust across alternative specifications and measurements, and provide policy implications for improving green financial systems and advancing low-carbon transitions in emerging economies.},
  keywords = {green finance, low-carbon economic development, green technology innovation, government intervention},
  issn = {3068-5540},
  publisher = {Institute of Central Computation and Knowledge}
}

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