This study uses the green finance reform and innovation pilot zone policy approved by the State Council in 2017 as a quasi-natural experiment to explore whether the implementation of the policy has improved the level of green finance development and environmental quality in Chinese cities at the prefecture level and above. The results show that the green financial reform and innovation pilot zone policy can significantly improve the level of regional green financial development and environmental quality, and the results are robust. Further heterogeneity analysis finds that the green financial reform and innovation pilot zone policy have heterogeneous effects on the level of green financial development and environmental quality in different regions, sizes, environmental regulation intensity, financial development levels, and cities of different administrative levels. Based on this conclusion, suggestions are made that the scope should be further expanded and green finance policies should be formulated differently.

Keywords: Environmental quality; Green financial development level; Green financial reform and innovation pilot zone.

© 2023. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.