Green Finance, Climate Stress and Sustainable Land Management in China's Land‐Degraded Regions: Evidence of Spatial and Threshold Effects

ABSTRACT

This study examined how green finance was associated with sustainable land management in selected land‐degraded provinces in China under climate stress. Using a balanced provincial panel of nine provinces from 2011 to 2023, the study constructed composite indices for sustainable land management, green finance and climate stress and estimated fixed‐effects, spatial and threshold models. The results showed that green finance was positively and significantly associated with sustainable land management. Spatial tests further indicated positive and persistent clustering in land‐management performance, while spatial regressions revealed that neighbouring green finance was positively related to local land‐management outcomes, indicating regional spillover effects across neighbouring provinces. Threshold estimates showed that the positive association between green finance and sustainable land management weakened once climate stress exceeded a critical level, although the relationship remained significant under both lower‐ and higher‐stress regimes. These findings suggest that green finance is an important enabling mechanism for land restoration and adaptive land governance, but its effectiveness depends on regional coordination and climate‐sensitive targeting in selected degraded ecosystems within China's vulnerable dryland areas.