China's Science and Technology Finance Ecosystem Shows Dual Impact on Carbon Reduction with Negative Spatial Spillover
Key Insights
China's Science and Technology Finance Ecosystem (STFE) effectively reduces local carbon emissions, but creates a negative 'beggar-thy-neighbor' spillover effect on neighboring cities.
The STFE exhibits a spatial imbalance across China, with higher development concentrated in eastern regions and lower in western areas, impacting Total Factor Carbon Productivity (TFCP).
This negative spatial spillover is primarily driven by mechanisms including green technology innovation siphoning, human capital migration, and competitive financial resource allocation.
Regional heterogeneity shows the negative spillover is prominent in eastern cities, while non-resource and high-financial-development areas exhibit positive effects on neighbors.
A new comprehensive study reveals that China's burgeoning science and technology financial ecosystem (STFE) significantly contributes to local carbon emission reduction, yet paradoxically creates a negative "beggar-thy-neighbor" spatial spillover effect on neighboring cities. Analyzing panel data from 284 prefecture-level cities across China between 2011 and 2020, researchers utilized a dynamic spatial Durbin model to uncover the nuanced mechanisms at play, offering critical insights for policymakers aiming to achieve national "dual-carbon" goals.
The study, which constructed an STFE evaluation system based on macro-environment and micro-community subsystems, found a distinct spatial imbalance in China's STFE development, with a pronounced "high in the east and low in the west" pattern. While local STFE development demonstrably enhances Total Factor Carbon Productivity (TFCP) within a city, its growth appears detrimental to carbon emission reduction in adjacent regions. This negative externality is attributed to several key mechanisms: the siphoning of green technology innovation, human capital migration, a widening digital divide in informatization development, and competitive exclusion in financial resource allocation.
Further heterogeneity analysis indicated that the adverse spatial spillover is predominantly observed in China's eastern regions. Conversely, non-resource-dependent cities and areas with high financial development levels exhibited a more prominent positive spatial spillover effect from their STFE on neighboring regions' carbon reduction efforts. This suggests that the impact of STFE is not uniform and is heavily influenced by regional economic structure and development maturity.
China, as the world's largest carbon emitter, has committed to ambitious "dual-carbon" goals to peak emissions before 2030 and achieve carbon neutrality before 2060. The findings underscore the critical role of the STFE in this transition, providing crucial financial and technical support for low-carbon projects, fostering emerging industries, and facilitating the digital and intelligent transformation of traditional sectors. However, the observed negative externalities highlight a significant challenge: uncoordinated regional STFE development could impede overall national carbon reduction progress. The research emphasizes that while the STFE can direct capital to high-return, socially significant technology projects, enhancing overall social innovation efficiency, its competitive aspects must be managed to ensure equitable benefits across regions. These conclusions offer a new research perspective and provide practical guidelines for strengthening STFE construction and fostering a robust low-carbon economy.