How financial geo-density mitigates carbon emission intensity: Transmission mechanisms in spatial insights

Controlling carbon emissions and sustaining growth constitute essential concerns in the post-financial crisis era combined with low-carbon sustainable development. However, the impact of financial development on carbon emissions remains controversial and lacks mechanisms investigation covering finance spatial attributes. Relying on China province's data during 2005-2019, this paper contributes to the literature by constructing multi-spatial models to investigate how financial geo-density mitigates carbon emission intensity and explore the spatial transmission mechanisms. The results reveal that there is a balance between financial geo-density and carbon emission intensity. The intrinsic mechanisms include: (1) raising financial geo-density is accompanied by the law of marginal diminishing carbon emission intensity tendency; (2) high financial geo-density accelerates technological innovation and industrial structure upgrading, thereby decreasing carbon emission intensity, but drives industrial-scale expansion, thereby increasing carbon emission intensity; and (3) financial institution competition and inter-industry linkage notably influence the relationship between financial geo-density and carbon emission intensity, promoting the emission reduction effect of financial geo-density in accelerating technological innovation and industrial structure upgrading, and suppressing the emission increase effect of financial geodensity in driving industrial expansion. Our findings provide new insights for developing systemic emission reduction policies for employing financial sectors as catch-all and integrating industries and competition.