Energy policy and financial performance in China: mediation effect of financial inclusion

The issues of cleaner production and socioeconomic advancements have taken a central stage due to the dynamism of the correlation between energy use and ecology. Given this background, the research delves into how to construct a framework to unravel diverse understandings of energy policy vis-a-vis green economy by examining the mediating role of financial inclusion. The analysis applied a non-radial DEA and longitudinal dataset model for the scenarios of thirty regions in China, relying on their longitudinal dataset from 2010–2017. The findings indicate that the Chinese regions’ total green economic performance indicator (EPI) has advanced by 9.88% between 2010 and 2017. In addition, the econometric analyses prove that regional renewable energy policies and pollution abatement programs explicitly influence the improvement of the environmental performance index. Again, the results show that the probability figures of the individual specific limit equation and the dual limit values crossed the 1% significance analysis level simultaneously, indicating a dual limit impact. 0.74 to 1 is the range that marks the green EPI for Jiangsu, Shandong, Guangdong, Hainan, Zhejiang, Shanghai and Fujian. Ultimately, the analysis serves as a policy inference tool for policy formulators and regulators on encouraging green economic performance in China.