Abstract
This paper investigates whether emerging digital finance can reduce environmental pollution in China based on data from 273 of China’s prefecture-level cities spanning the period from 2010 to 2017. The dynamic spatial econometric models (DSDM) find a significant negative association between digital finance and pollutants emissions, and the impacts vary among regions and urban development stages. The impact mechanism test proves that digital finance reduces pollutants emissions through technological innovation, structural adjustment, and capital allocation effects. In addition, we explore the different dimensions of digital finance and find that the depth of use has a more practical effect on reducing emissions. Further analyses based on the threshold model show an inverted N-shaped nexus between digital finance and emissions. The threshold effect also exists in terms of the traditional financial level. Our study proves that emerging digital finance crucially affects its potential benefits to environment and provides an empirical basis for policy-makers to accelerate the digitalization of financial markets, particularly paying attention to its emission-reduction effects.
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The data comes from the Digital Finance Research Center of Peking University
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Data availability
The data that support the findings of this study are available from the leading author, Jiayu Wan, upon reasonable request.
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Acknowledgements
I would first like to thank my thesis advisor Zhengning Pu and Christophe Tavera, for their precious comments. Secondly, the authors acknowledge financial support from China's National Social Science Fund (No. 19BJL024).
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This study received financial support from the National Social Science Fund of China under Grant [Project Number: 19BJL024].
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All authors contributed to the study’s conception and design. Jiayu Wan conceived the study and was responsible for the design and development of the data analysis, and wrote the first draft of the article. Zhengning Pu and Christophe Tavera were responsible for the editing and revisions.
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Wan, J., Pu, Z. & Tavera, C. The impact of digital finance on pollutants emission: evidence from chinese cities. Environ Sci Pollut Res 30, 42923–42942 (2023). https://doi.org/10.1007/s11356-021-18465-4
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DOI: https://doi.org/10.1007/s11356-021-18465-4