How does green floating bond and financial sector readiness promote green economic growth evidence from China

Global awareness about environmental issues and sustainable economic development has grown recently. This research examines how green floating bonds and financial sector preparation promote green economic development in China's regions. Policymakers are considering green bonds to solve environmental issues. Green floating bonds enable interest rate adjustments based on environmental performance metrics. Using a panel dataset from 2011 to 2019, we use econometric models to evaluate the link between green floating bonds, financial sector preparedness, and green economic development in China. Our findings show that green floating bonds finance ecologically beneficial initiatives by increasing green economic development. Financial sector preparedness, evaluated by banking efficiency, depth, and development, boosts green economic growth via green floating bonds. These results demonstrate the relevance of new financial mechanisms and a supportive financial sector in sustainable development. This research adds to the green finance literature and provides policymakers and practitioners in Asian countries with significant insights.