Green investment and quality of economic development: Evidence from China

Abstract

Green investment, a key element of green finance, is vital for enhancing the quality of economic development (EDQ); however, green investment remains understudied. This study developed a comprehensive evaluation index for EDQ, considering five factors: innovation, coordination, greenness, openness, and sharing. Findings show that green investment enhances EDQ through industrial structure transformation and upgrading, green technological innovation, and carbon reduction. We also find that green investment has a significant positive spillover effect on EDQ. Green investment significantly promotes EDQ in the eastern region of China and in areas with higher levels of economic and financial development. The positive impact of green investment on EDQ becomes significant when per capita GDP exceeds a certain threshold and increases as per capita GDP increases.