Digital finance, green technological innovation and energy-environmental performance: Evidence from China's regional economies

• Published in: Journal of Cleaner Production Vol. 327; p. 129458
• Main Authors: Cao, Shaopeng, Nie, Liang, Sun, Huaping, Sun, Weifeng, Taghizadeh-Hesary, Farhad
• Format: Journal Article
• Language: English; Japanese
• Published: Elsevier Ltd 10.12.2021; Elsevier BV
• Subjects: China; credit; Difference-in-difference model; Digital finance; energy conservation; Energy-environmental performance; environmental law; Green technological innovation; information technology; sustainable technology; China; Energy-environmental performance; Digital finance; Q56; R11; G20; China; Difference-in-difference model; Green technological innovation
• ISSN: 0959-6526; 1879-1786
• DOI: 10.1016/j.jclepro.2021.129458

Conventional finance has many deficiencies in promoting green technology innovation (GTI) and energy-environmental performance (EEP). The emerging digital finance is filling the gaps left by conventional finance with the support of information technology. Using panel data from 2011 to 2017, the paper explores the impact of digital finance on energy-environmental performance in China. The results show that digital finance significantly improves China's energy-environmental performance, which remains robust after a series of tests. Green technology innovation is the transmission path through which digital finance affects energy-environmental performance. The impact mechanism test proves that digital finance affects pure technical efficiency rather than scale efficiency. Furthermore, we also find that digital finance has a greater stimulus effect on energy-environmental performance where credit and capital markets are more immature. Financial supervision and environmental regulation from the Chinese government can reinforce the role of digital finance in promoting energy-environmental performance. Our study suggests that China should accelerate digitization in the financial markets, particularly in pursuit of its energy-saving and emission-reduction effects. •Digital finance can improve energy-environmental performance significantly.•The green technology innovation is the primary mechanism for the improvement of energy-environmental performance.•Instrumental variable, Semiparametric, DID models are employed to exclude endogeneity.•Credit and capital markets, financial and environmental supervision can reinforce the role of digital finance.