Can green finance policy promote ecosystem product value realization? Evidence from a quasi-natural experiment in China

This study takes the Green Finance Pilot Zones (GFPZ) policy in China as a quasi-natural experiment and employs the synthetic control method to test the policy effect of GFPZ on ecosystem product value realization, using the province-level gross ecosystem product (GEP) panel data from 2011 to 2020. The results reveal that GFPZ significantly promotes the value realization of ecosystem products, this positive impact remains robust after the test of spatial placebo studies, leave-one-out estimation, difference-in-differences (DID) method, and controlling the effects of other policy impacts. Meanwhile, the ecological transformation of industries and ecological industry development serves as the critical mechanism pathways for GFPZ to realize the value of ecosystem products. In addition, we identify significant spatial spillover effects resulting from GFPZ implementation. Heterogeneity analysis reveals that the impact of the GFPZ policy on ecosystem product value realization is more significant in the central, the western regions, and the areas with high financial development levels. Moreover, for heterogeneous policy goals, GFPZ has greater policy impacts in ecologically vulnerable regions, followed by industrial upgrading regions, while the impact on the resource development region is not significant. These findings provide empirical evidence on the attributions of green finance policy to sustainable development and underscore the pressing need for enhancing the effective adaptation of green finance policy to local circumstances, making full use of green finance tools to promote ecosystem product value realization and advance sustainable development.