Breaking the resource curse: The impact of green finance on the energy transition of resource-based cities

Resource-based cities face a fundamental tension between their dependence on fossil fuel industries and the imperative of decarbonization. This study investigates whether and how green finance can promote the energy transition in China's resource-based cities, using panel data from 114 cities over the period 2011–2022. Employing two-way fixed effects, mediation analysis, and spatial Durbin models, we examine green finance's direct impact on the energy transition, its transmission mechanisms, and spatial spillover dynamics. Our results demonstrate that green finance significantly accelerates the energy transition through three channels: industrial structure upgrading, green technological innovation, and financing constraint alleviation. Spatial analysis reveals significant positive spillover effects that attenuate with geographic distance, with an effective boundary of approximately 1,000 km. However, these impacts vary substantially across contexts: green finance significantly promotes energy transition in northern cities, mature and regenerating cities, and energy transition and low-carbon pilot cities, while declining resource-based cities show no significant response, a pattern attributable to supply-side financial capacity gaps, demand-side asset lock-in, and institutional constraints. These findings extend the green finance literature by quantifying city-level transmission mechanisms and spatial dynamics in resource-dependent settings, and provide policymakers with evidence for designing differentiated strategies that address the distinct transition challenges facing different types of resource-based cities. • Green finance significantly accelerates energy transition in China's resource-based cities. • Effects operate through industrial upgrading, green innovation, and financing constraint alleviation. • Spatial spillover effects extend approximately 1000 km, attenuating with geographic distance. • Northern, mature, and pilot cities benefit most; declining resource cities show no significant response. • Findings support differentiated policy design for diverse resource-based city contexts.