Abstract
The crucial role of green finance policies in advocating environmental sustainability cannot be overlooked and has resulted in an increased attention in recent years. Despite their significance, the connection between these policies and economic growth remains disputed among policymakers. This study presents an empirical analysis that aims to uncover the relationship between green finance policies and economic growth rates by analysing the data from 107 cities in China, spanning a period of 16 years from 2003 to 2019. The research focuses on the implications of green finance reforms and innovation pilot zones by employing PSM-DID model to evaluate their effects on the regional GDP by segregating the industries in primary, secondary, and tertiary industries. The results indicate that the green finance reforms and innovation pilot zones are associated with reduced growth rates of regional GDP for secondary industries. However, the growth rates of the tertiary industry are positively affected. Thus, the study offers valuable guidance and recommendations to policymakers and cities seeking to join the pilot zones for green financial reform to foster economic growth while supporting environmental sustainability. The findings of the study also contribute to the understanding of how targeted policy interventions, such as the establishment of pilot zones, can influence economic dynamics at the regional level and describes the complex relationship between policy interventions, economic growth, and industry composition, particularly in the context of environmental sustainability.