Research on World Agricultural Economy

Green Finance and the Transformation of Agricultural Structure in China: Empirical Evidence from Urban Panel Data (2013–2023)

Min Cao

School of Management, Universiti Sains Malaysia, Penang 11800, Malaysia

Nurhafiza Abdul Kader Malim

School of Management, Universiti Sains Malaysia, Penang 11800, Malaysia

DOI: https://doi.org/10.36956/rwae.v6i4.2337

Received: 17 June 2025 | Revised: 25 June 2025 | Accepted: 3 July 2025 | Published Online: 4 September 2025

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Abstract

Green finance (GF) offers sustainable solutions to challenges in agricultural sustainable development. This study examines the impact and mechanism of GF on the transformation of agricultural structure (AST). The problem statement highlights that although China emphasizes the establishment of a rural financial system and takes rural revitalization as a national strategy, issues related to innovative rural financial products and promoting rural economic development remain challenging. Using a dataset with 2505 observations spanning the period of 2013–2023 on China’s urban population, we utilize a two-way fixed effects model to explore the relationship between GF and AST. In addition, a mediation effect model is constructed to analyze the impact of GF on AST from the perspectives of green sustainable innovation (GSI), green consumption levels (GCL), and credit allocation efficiency (CAE). To account for regional disparities, we conducted heterogeneity analyses both at the urban level and by geographic region. The results indicate that GF effectively stimulates AST by optimizing CAE, enhancing GCL, and promoting GSI. Specifically, an increase in the share of agricultural inputs supporting sustainable and green development significantly altered the structure of agricultural outputs. Additionally, the findings suggest that the influence of GF on AST shows regional heterogeneity, which is more significant in low-urbanized cities in the eastern and central regions of China. This study provides insights into how global agriculture can seize opportunities for sustainable development within the context of the GF.

Keywords: Green Finance; Transformation of Agricultural Structure; Fixed Effects Model; Mediating Effect

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