Analysis of the Relationship between Regional Carbon Financial Market Development and Industrial Structure Upgrading: A Grey Relational Model Approach

Abstract

Carbon finance, recognized globally as one of the effective solutions to combat global warming, is poised to inject fresh vitality into economic and societal production as it develops. Based on data from 13 cities in the Beijing-Tianjin-Hebei region, this study explores how the development of the carbon finance market affects industrial structure upgrading from the perspectives of carbon finance market development level and industrial structure upgrading. Firstly, by constructing an evaluation indicator system, a comprehensive comparative analysis of the carbon finance market development and industrial structure upgrading of these cities is conducted. Secondly, the study uses the grey relational model to delve into the degree of correlation between the development level of the carbon finance market and the upgrading of the industrial structure. The result shows significant regional disparities among these cities in terms of the development of the carbon finance market and the upgrading of industrial structure. Beijing and Tianjin lead in terms of carbon finance market development. Through the analysis using the grey relational model, it is found that there is a moderate to strong correlation between the level of development of the carbon finance market and industrial structure optimization, indicating the importance of all factors in influencing industrial structure upgrading. Empirical results demonstrate that, on a holistic scale, the development of carbon finance has a significantly positive impact on industrial structure advancement and rationalization. However, disparities exist among different cities, primarily attributed to varying levels of economic development, policy orientation, and developmental stages.