Green finance (GF) holds significant potential in fostering high-quality economic development (HED), enhancing societal affluence consistency, and alleviating poverty by promoting sustainable development, innovation, and resilience. This study addresses environmental challenges and the promotion of sustainable economic growth through the pivotal tools of GF. We employ spatial spillover, quantile regression, and regional-wise models to derive four key findings. Firstly, baseline regression analysis reveals a noteworthy positive association between GF and HED, indicating that the adoption and utilization of green financial mechanisms significantly advance economic development while maintaining ecological sustainability. Secondly, using a spatial econometric model, this study identifies the presence of a spillover effect, showing that the positive impact of GF on HED extends beyond individual provinces and contributes to overall economic development on a broader geographical scale. Thirdly, the analysis of regional heterogeneity demonstrates that the correlation between GF and HED varies across different regions of China. Notably, a significant association between GF and HED is observed in the western region, highlighting the importance of considering regional disparities in the implementation and effectiveness of green financial policies. Lastly, through quantile regression analysis, this study uncovers non-linear relationships between GF and HED, emphasizing that the impact of green financial strategies on economic development varies across different quantiles of the economic development distribution. This study provides several practical policy implications for financial institutions and policymakers. The study examines the role of Green Finance (GF) in promoting High-quality Economic Development (HED) across 31 provinces of China from 2006 to 2020. We used spatial spillover, quantile regression, and regional models to analyze the relationship between GF and HED. The baseline regression shows a positive relationship, with spillover effects indicating GF's impact extends beyond individual provinces. Regional analysis reveals a significant GF-HED relationship, particularly in western China, representing regional variation in policy effectiveness. Quantile regression confirms a non-linear GF-HED association. This study advocates for financial transfers to address regional disparities. Diagnosing fences hindering GF effectiveness and implementing tailored strategies to overcome these challenges are critical steps toward inspiring HED. This study contributed to the existing literature by addressing a previous relationship, including non-linear, spatial spillover effects and regional analysis. It offers fresh insights into environmental practices and aims to attain sustainable development goals through the promotion of sustainable and green finance.
