Can green finance policy promote inclusive green growth?- Based on the quasi-natural experiment of China's green finance reform and innovation pilot zone

Sustainable development and inclusive growth are widely recognized as the primary objectives of global development today, with green finance emerging as a critical enabler of these goals. This paper explores the impact of green finance policy, particularly within the framework of the Green Finance Reform and Innovation Pilot Zone, by analyzing data from 270 prefecture-level cities across China from 2010 to 2022. The study assesses both the direct effects and the underlying mechanisms through which green finance contributes to inclusive green growth. The findings reveal that green finance policy significantly promote inclusive green growth, a result that remains robust across various validation tests. The effectiveness of these policies is driven by several intermediary factors, including advances in green technology innovation, improvements in energy efficiency, enhanced entrepreneurial activity in urban areas, and growing public awareness of environmental issues. However, the outcomes are also influenced by the availability of urban financial resources, the leadership qualities of local government officials, the degree of market liberalization, and the strength of environmental law enforcement. Further analysis demonstrates that green finance policy have considerable spatial spillover effects, promoting inclusive green growth in neighboring cities and creating a model effect for others to follow. • Green finance policy significantly promoted inclusive green growth. • Green technology innovation, energy utilization efficiency, urban Entrepreneurship vitality and public environmental concerns are the main transmission mechanism. • The impact effect of green finance policy will be affected by the level of urban financial elements, the characteristics of leading cadres, the level of marketization and the strength of environmental law enforcement. • Green finance policy has significant spatial spillover effects on inclusive green growth and demonstration effects on neighboring cities.