The Measurement of Green Finance Development Index and Its Poverty Reduction Effect: Dynamic Panel Analysis Based on Improved Entropy Method

Abstract EN

Finance contributes to poverty alleviation through economic growth, and the development of green finance is related to the sustainable development of the world economy and environment.

Green finance not only helps promote sustainable economic development but also helps reduce poverty.

Based on the analysis of related theories about green finance and poverty alleviation, this paper selects 18 indicators from three dimensions of economic development, financial development, and social environmental development and uses the improved entropy method to measure the green finance development index of China’s 25 provinces and municipalities from 2004 to 2017.

The results show that the development level of green finance in China’s 25 provinces and municipalities is quite different.

On the basis of the above analysis, make an empirical analysis of the impact of the green finance development index on poverty alleviation using multiple regression analysis and static panel and dynamic panel estimation methods.

The research results show that there is a significant positive correlation between green finance and poverty alleviation; the higher the level of green finance development, the more conducive the poverty alleviation.

So, this paper suggests that poverty can be better alleviated by improving the level of green finance development, financial asset level, and economic development level.