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Going green in China: how does digital finance affect environmental pollution? Mechanism discussion and empirical test

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Abstract

With the continuous advancement of the technological revolution and industrial transformation, environmental governance supported by digital finance has become an important engine for achieving carbon neutrality. Based on panel data from 30 provinces in China, this study discusses the spatial spillover effect and transmission mechanism between digital finance and environmental pollution. Our research results confirm that the inhibitory effect of digital finance on local environmental pollution gradually increases with the improvement of digital finance. Interestingly, digital finance has a significant positive spatial spillover effect on environmental pollution in surrounding areas. The mediating effect shows that digital finance can alleviate environmental pollution by improving technological innovation, industrial upgrading and industrial structure rationalization. A higher degree of marketization and governmental support can increase the positive influences of digital finance on pollution reduction. This research proves the effectiveness of digital finance in improving environmental governance, and it encourages policy-makers around the world to rely on digital finance to promote ecological governance and achieve high-quality economic development.

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Funding

This work was supported by the Major Program of the National Social Science Foundation of China (21&ZD151) and the Beijing Commercial Development Research Center (JD-YB-2022–050).

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Authors and Affiliations

  1. School of Economics, Beijing Technology and Business University, Beijing, 100048, China

    Mingyue Du, Yifan Hou & Qingjie Zhou

  2. Institute of New Commercial Economy, Beijing Technology and Business University, Beijing, 100048, China

    Mingyue Du & Qingjie Zhou

  3. School of Economics, Nankai University, Tianjin, 300071, China

    Siyu Ren

  4. Center for Transnationals’ Studies of Nankai University, Nankai University, 300071, Tianjin, China

    Siyu Ren

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  1. Mingyue Du
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  2. Yifan Hou
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  4. Siyu Ren
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Contributions

Qingjie Zhou: conceptualization, methodology, funding acquisition, and supervision. Mingyue Du: conceptualization, project administration, formal analysis, data curation, and writing-original draft. Yifan Hou: writing-review and editing and validation. Siyu Ren: conceptualization, methodology, and supervision.

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Correspondence to Siyu Ren.

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Du, M., Hou, Y., Zhou, Q. et al. Going green in China: how does digital finance affect environmental pollution? Mechanism discussion and empirical test. Environ Sci Pollut Res 29, 89996–90010 (2022). https://doi.org/10.1007/s11356-022-21909-0

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