Effects of Science and Technology Finance on Green Total Factor Productivity in China: Insights from an Empirical Spatial Durbin Model

Undoubtedly, science and technology (sci-tech) finance plays a vital role in promoting innovation and industrial structure. Sci-tech finance may also affect green total factor productivity (GTFP). However, the research that integrates sci-tech finance and GTFP in the same environmental policy framework is still scant. In this context, the spatial spillover effect and mechanism of the impact of sci-tech finance on GTFP were empirically analyzed using the panel data of 30 provinces in China from 2010 to 2020. The slacks-based measure (SBM) model of non-expected output and the GML index were used to measure the GTFP, and the entropy weight method was used to measure the development level of sci-tech finance in each province. The results unveil that sci-tech finance and GTFP in China have significant spatial autocorrelation and spatial disequilibrium; the positive driving effect of sci-tech finance on GTFP has a significant spatial spillover effect. The mechanism test finds that sci-tech finance enhances local GTFP by expanding R&D expenditures and optimizing industrial structure, and the spatial spillover effect of sci-tech finance on GTFP in neighboring regions is realized by expanding R&D expenditures in neighboring regions. The heterogeneity test found that sci-tech finance has a significant positive effect on GTFP in the eastern region, an insignificant positive effect on the central regions, and a significant negative effect on the western and northeastern regions. Therefore, regional collaboration alliances should be established to fully play the spatial effect of sci-tech finance and enhance GTFP.