The impact of urban digital finance development on carbon emission performance in China and mechanism

Abstract

Based on a theoretical analysis, this study used the balanced panel data of 285 city samples in China from 2012 to 2018 to empirically analyze the impact of digital finance development on carbon emission performance by using the panel regression model and instrumental variable method. The results show that: (1) The development of digital finance significantly reduces the carbon emission intensity and improves the carbon emission efficiency, and the improvement of the coverage, use depth, and digitalization degree of digital finance improves the carbon emission performance. (2) The analysis of intermediary mechanism shows that the development of digital finance reduces carbon emission intensity through economic growth effect, industrial structure effect, and technological innovation effect, and improves carbon emission efficiency through economic growth effect and technological innovation effect. In general, the development of digital finance improves carbon emission performance through these three effects. (3) The results of heterogeneity analysis show that the development of digital finance is more conducive to reducing the carbon emission intensity of cities with low economic development level and low financial development level; with regard to carbon emission efficiency, the development of digital finance is more conducive to improving the carbon emission efficiency of cities with high economic development level and high financial development level, which is a result of the different basic conditions of technological innovation.