The Impact of Digital Finance on Green Total Factor Energy Efficiency: Evidence at China’s City Level

• Published in: Energies (Basel) Vol. 15; no. 15; p. 5455
• Main Authors: Liu, Yang, Xiong, Ruochan, Lv, Shigong, Gao, Da
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.08.2022
• Subjects: Cities; Data envelopment analysis; Developing countries; digital finance; Economic development; Economic growth; Energy consumption; Energy efficiency; Environmental impact; Environmental protection; Environmental regulations; Financial institutions; Financial services; green technology innovation; green total factor energy efficiency; industrial structure upgrading; Innovations; LDCs; Low income groups; Mathematical programming; Research & development expenditures; Small & medium sized enterprises-SME; China
• ISSN: 1996-1073; 1996-1073
• DOI: 10.3390/en15155455

The rapid development of digital finance has delivered significant benefits, such as sustainable development and economic growth. We explore the relationship between digital finance and green total factor energy efficiency (GTFEE) for the first time, filling a gap in the existing literature. This paper uses dynamic panel models to explore digital finance’s impact on GTFEE at the Chinese city-level panel data from 2011 to 2018. The results show that digital finance can significantly improve urban GTFEE, and the findings remain robust with various tests. Second, the mechanism analysis indicates that digital finance can improve GTFEE by promoting urban green technology innovation and industrial structure upgrading. Further study shows that digital finance has a better effect on the improvement of GTFEE in central and western cities, small cities and non-resource-based cities, but has no significant or small impact on GTFEE in eastern cities, large cities and resource-based cities, reflecting the inclusiveness of digital finance.