Abstract
Developing renewable energy (RE) is the inevitable choice for China to achieve its climate goals. However, financing RE investments remains challenging. Meanwhile, China’s digital finance (DF) is profoundly influencing the trajectory of the energy transition. This study empirically investigates the role of DF on the growth of RE, what aspects of DF matter, and its geographical attenuation process, taking both spatial and temporal dimensions into consideration. The empirical results show that DF and its coverage breadth and usage depth can facilitate RE development in both local and neighboring regions, with a comparatively limited effect of digitalization level. The impact of DF on the growth of RE is heterogeneous and has been declining over time. Specifically, this effect is observable only in the eastern regions. The spillover effects of DF on RE development vary in different spatial thresholds, which has clear boundary effects and geographical decay characteristics.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data Availability
All data generated or analyzed during this study are included in this article.
References
Aarakit SM, Ntayi JM, Wasswa F, Buyinza F, Adaramola MS, Ssennono VF (2022) The role of financial inclusion in adoption of solar photovoltaic systems: a case of Uganda. Renew Energy 198:984–998. https://doi.org/10.1016/j.renene.2022.08.056
Amuakwa-Mensah F, Näsström E (2022) Role of banking sector performance in renewable energy consumption. Appl Energy 306:118023. https://doi.org/10.1016/j.apenergy.2021.118023
Anselin L, Bera AK, Florax RJ, Yoon MJ (1996) Simple diagnostic tests for spatial dependence. Reg Sci Urban Econ 26(1):77–104. https://doi.org/10.1016/0166-0462(95)02111-6
Anton SG, Nucu AE (2020) The effect of financial development on renewable energy consumption. Panel Data Approach Renew Energy 147:330–338. https://doi.org/10.1016/j.renene.2019.09.005
Asante D, He Z, Adjei NK, Asante B (2020) Exploring the barriers to renewable energy adoption utilising Multimoora- EDAS method. Energy Policy 142:111479. https://doi.org/10.1016/j.enpol.2020.111479
Brown SJ, Brown MA, Madlener R, Thomas SH, Zhou P, Antunes C, Yeh S, Du H, Goutte S (2020) The continuing evolution of energy policy. Energy Policy 139:111459. https://doi.org/10.1016/j.enpol.2020.111459
Burakov D, Freidin M (2017) Financial development, economic growth and renewable energy consumption in Russia: a vector error correction approach. DOAJ. Directory of Open Access Journals, DOAJ
Cao S, Nie L, Sun H, Sun W, Taghizadeh-Hesary F (2021) Digital finance, green technological innovation and energy-environmental performance: evidence from China’s regional economies. J Clean Prod 327:129458. https://doi.org/10.1016/j.jclepro.2021.129458
Cergibozan R (2022) Renewable energy sources as a solution for energy security risk: empirical evidence from OECD countries. Renew Energy 183:617–626. https://doi.org/10.1016/j.renene.2021.11.056
Chang L, Qian C, Dilanchiev A (2022) Nexus between financial development and renewable energy: empirical evidence from nonlinear autoregression distributed lag. Renew Energy 193:475–483. https://doi.org/10.1016/j.renene.2022.04.160
Chen Y (2018) Factors influencing renewable energy consumption in China: an empirical analysis based on provincial panel data. J Clean Prod 174:605–615. https://doi.org/10.1016/j.jclepro.2017.11.011
Chen B, Zhao C (2021) Poverty reduction in rural China: does the digital finance matter? PLoS One 16(12):e0261214. https://doi.org/10.1371/journal.pone.0261214
Chen H, Liu K, Shi T, Wang L (2022a) Coal consumption and economic growth: a Chinese city-level study. Energy Economics 109:105940. https://doi.org/10.1016/j.eneco.2022.105940
Chen Y, Yang S, Li Q (2022b) How does the development of digital financial inclusion affect the total factor productivity of listed companies? Evidence from China. Finance Res Lett 47:102956. https://doi.org/10.1016/j.frl.2022.102956
Croutzet A, Dabbous A (2021) Do FinTech trigger renewable energy use? Evidence from OECD countries. Renew Energy 179:1608–1617. https://doi.org/10.1016/j.renene.2021.07.144
Delina LL (2023) Fintech RE in a global finance centre: expert perceptions of the benefits of and challenges to digital financing of distributed and decentralised renewables in Hong Kong. Energy Res Soc Sci 97:102997. https://doi.org/10.1016/j.erss.2023.102997
Dimnwobi SK, Madichie CV, Ekesiobi C, Asongu SA (2022) Financial development and renewable energy consumption in Nigeria. Renew Energy 192:668–677. https://doi.org/10.1016/j.renene.2022.04.150
Elhorst J (2014) Spatial econometrics: from cross-sectional data to spatial panels. Springer EBooks. http://ci.nii.ac.jp/ncid/BB14687253
Feng J, Sun Q, Sohail S (2022a) Financial inclusion and its influence on renewable energy consumption-environmental performance: the role of ICTs in China. Environ Sci Pollut Res 29(35):52724–52731. https://doi.org/10.1007/s11356-022-19480-9
Feng S, Chong Y, Yu H, Ye X, Li G (2022b) Digital financial development and ecological footprint: evidence from green-biased technology innovation and environmental inclusion. J Clean Prod 380:135069. https://doi.org/10.1016/j.jclepro.2022.135069
Feng S, Zhang R, Li G (2022c) Environmental decentralization, digital finance and green technology innovation. Struct Chang Econ Dyn 61:70–83. https://doi.org/10.1016/j.strueco.2022.02.008
Fu Z, Zhou Y, Li W, Zhong K (2022) Impact of digital finance on energy efficiency: empirical findings from China. Environ Sci Pollut Res 30(2):2813–2835. https://doi.org/10.1007/s11356-022-22320-5
Gao K, Chen H, Tian S, Sun R, Cui K, Zhang Y (2023) A nexus between green digital finance and green innovation under asymmetric effects on renewable energy markets: a study on Chinese green cities. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-24750-7
Guo F, Wand J, Wang F, Kong T, Zhang X, Cheng Z (2020) Measuring China’s digital financial inclusion: index compilation and spatial characteristics. China Econ Q (in China) 19(4):1401–1418
Halpern L, Muraközy B (2007) Does distance matter in spillover? Econ Transit 15(4):781–805. https://doi.org/10.1111/j.1468-0351.2007.00308.x
Hasanov F, Huseynov F (2013) Bank credits and non-oil economic growth: evidence from Azerbaijan. Int Rev Econ Financ 27:597–610. https://doi.org/10.1016/j.iref.2013.02.005
He Z, Chen H, Hu J, Zhang Y (2022) The impact of digital inclusive finance on provincial green development efficiency: empirical evidence from China. Environ Sci Pollut Res 29(60):90404–90418. https://doi.org/10.1007/s11356-022-22071-3
Huang X, Meng F (2023) Digital finance mitigation of ‘resource curse’ effect: evidence from resource-based cities in China. Resour Policy 83:103711. https://doi.org/10.1016/j.resourpol.2023.103711
Huang H, Mbanyele W, Fan S, Zhao X (2022) Digital financial inclusion and energy-environment performance: what can learn from China. Struct Chang Econ Dyn 63:342–366. https://doi.org/10.1016/j.strueco.2022.10.007
Ibrahim R, Al-Mulali U, Ozturk I, Bello AK, Raimi L (2022) On the criticality of renewable energy to sustainable development: do green financial development, technological innovation, and economic complexity matter for China? Renew Energy 199:262–277. https://doi.org/10.1016/j.renene.2022.08.101
IEA (2015) Medium-Term Renewable Energy Market Report 2015, IEA, Paris. https://www.iea.org/reports/mediumterm-renewable-energy-market-report-2015
IRENA, CPI (2020) Global Landscape of Renewable Energy Finance, 2020, International Renewable Energy Agency, Abu Dhabi
Ji Q, Zhang D (2019) How much does financial development contribute to renewable energy growth and upgrading of energy structure in China? Energy Policy 128:114–124. https://doi.org/10.1016/j.enpol.2018.12.047
Jiang Y, Guo C, Wu Y (2022) Does digital finance improve the green investment of Chinese listed heavily polluting companies? The perspective of corporate financialization. Environ Sci Pollut Res 29(47):71047–71063. https://doi.org/10.1007/s11356-022-20803-z
Khan KM, Su C, Rahman A, Ullah R (2022) Is technological innovation a driver of renewable energy? Technol Soc 70:102044. https://doi.org/10.1016/j.techsoc.2022.102044
Kul C, Zhang L, Solangi YA (2020) Assessing the renewable energy investment risk factors for sustainable development in Turkey. J Clean Prod 276:124164. https://doi.org/10.1016/j.jclepro.2020.124164
Kutan AM, Paramati SR, Ummalla M, Zakari A (2017) Financing renewable energy projects in major emerging market economies: evidence in the perspective of sustainable economic development. Emerg Mark Financ Trade 54(8):1761–1777. https://doi.org/10.1080/1540496x.2017.1363036
Lee C, He Z, Xiao F (2022) How does information and communication technology affect renewable energy technology innovation? International evidence. Renew Energy 200:546–557. https://doi.org/10.1016/j.renene.2022.10.015
LeSage J, Pace RK (2009) Introduction to spatial econometrics. Chapman Hall/CRC EBooks. https://doi.org/10.1201/9781420064254
Li J, Wu Y, Xiao JJ (2020b) The impact of digital finance on household consumption: evidence from China. Econ Model 86:317–326. https://doi.org/10.1016/j.econmod.2019.09.027
Li M, Feng S, Xie X (2022a) Spatial effect of digital financial inclusion on the urban–rural income gap in China—analysis based on path dependence. Ekonomska Istrazivanja-Econ Res 36(1):2999–3020. https://doi.org/10.1080/1331677x.2022.2106279
Li G, Zhang R, Feng S, Wang Y (2022b) Digital finance and sustainable development: evidence from environmental inequality in China. Bus Strateg Environ 31(7):3574–3594. https://doi.org/10.1002/bse.3105
Li X, Shao X, Chang T, Albu L (2022c) Does digital finance promote the green innovation of China’s listed companies? Energy Econ 114:106254. https://doi.org/10.1016/j.eneco.2022.106254
Li G, Wu H, Jiang J, Zong Q (2023) Digital finance and the low-carbon energy transition (LCET) from the perspective of capital-biased technical progress. Energy Econ 120:106623. https://doi.org/10.1016/j.eneco.2023.106623
Li C, Yan X, Song M, Yang W (2020a) Fintech and corporate innovation——evidence from Chinese NEEQ-listed companies. China Industrial Economics 81–98 https://doi.org/10.19581/j.cnki.ciejournal.2020.01.006
Liu T, Hu M, Elahi E, Liu X (2022) Does digital finance affect the quality of economic growth? Analysis based on Chinese city data. Front Environ Sci 10 https://doi.org/10.3389/fenvs.2022.951420
Luthra S, Kumar S, Garg D, Haleem A (2015) Barriers to renewable/sustainable energy technologies adoption: Indian perspective. Renew Sustain Energy Rev 41:762–776. https://doi.org/10.1016/j.rser.2014.08.077
Mao Q, Ma X, Sun Y (2023) Study of impacts of blockchain technology on renewable energy resource findings. Renew Energy 211:802–808. https://doi.org/10.1016/j.renene.2023.05.038
Meng S, Sun R, Guo F (2022) Does the use of renewable energy increase carbon productivity? ——an empirical analysis based on data from 30 provinces in China. J Clean Prod 365:132647. https://doi.org/10.1016/j.jclepro.2022.132647
Mukhtarov S, Yüksel S, Dinçer H (2022) The impact of financial development on renewable energy consumption: evidence from Turkey. Renew Energy 187:169–176. https://doi.org/10.1016/j.renene.2022.01.061
Omri A, Nguyen DK (2014) On the determinants of renewable energy consumption: international evidence. Energy 72:554–560. https://doi.org/10.1016/j.energy.2014.05.081
Pata UK, Yilanci V, Zhang Q, Shah SAR (2022) Does financial development promote renewable energy consumption in the USA? Evidence from the Fourier-wavelet quantile causality test. Renew Energy 196:432–443. https://doi.org/10.1016/j.renene.2022.07.008
Pedroni P (1999) Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bull Econ Stat 61(s1):653–670. https://doi.org/10.1111/1468-0084.61.s1.14
Pu Z, Fei J (2022) The impact of digital finance on residential carbon emissions: evidence from China. Struct Chang Econ Dyn 63:515–527. https://doi.org/10.1016/j.strueco.2022.07.006
Qi X, Guo Y, Guo P, Yao X, Liu X (2022) Do subsidies and R&D investment boost energy transition performance? Evidence from Chinese renewable energy firms. Energy Policy 164:112909. https://doi.org/10.1016/j.enpol.2022.112909
Qin X, Wu H, Li R (2022) Digital finance and household carbon emissions in China. China Econ Rev 76:101872. https://doi.org/10.1016/j.chieco.2022.101872
Razzaq A, Yang X (2023) Digital finance and green growth in China: appraising inclusive digital finance using web crawler technology and big data. Technol Forecast Soc Chang 188:122262. https://doi.org/10.1016/j.techfore.2022.122262
Razzaq A, Sharif A, Ozturk I, Skare M (2022) Asymmetric influence of digital finance, and renewable energy technology innovation on green growth in China. Renew Energy 202:310–319. https://doi.org/10.1016/j.renene.2022.11.082
Sachan A, Kumar Sahu U, Kumar Pradhan A, Thomas R (2023) Examining the drivers of renewable energy consumption: evidence from BRICS nations. Renew Energy 202:402–411. https://doi.org/10.1016/j.renene.2022.11.080
Shahbaz M, Sinha A, Raghutla C, Vo XV (2022) Decomposing scale and technique effects of financial development and foreign direct investment on renewable energy consumption. Energy 238:121758. https://doi.org/10.1016/j.energy.2021.121758
Sharma R, Shahbaz M, Sharma R, Vo XV (2021) Analyzing the impact of export diversification and technological innovation on renewable energy consumption: evidences from BRICS nations. Renew Energy 178:1034–1045. https://doi.org/10.1016/j.renene.2021.06.125
Steffen B (2020) Renewable energy investment risk: an investigation of changes over time and the underlying drivers. Energy Policy 140:111428. https://doi.org/10.1016/j.enpol.2020.111428
Sun B, Li J, Zhong S, Liang T (2023) Impact of digital finance on energy-based carbon intensity: evidence from mediating effects perspective. J Environ Manage 327:116832. https://doi.org/10.1016/j.jenvman.2022.116832
Tang X, Zhou X (2023) Impact of green finance on renewable energy development: a spatiotemporal consistency perspective. Renew Energy 204:320–337. https://doi.org/10.1016/j.renene.2023.01.012
Tang X, Ding S, Gao X, Zhao T (2022) Can digital finance help increase the value of strategic emerging enterprises? Sustain Cities Soc 81:103829. https://doi.org/10.1016/j.scs.2022.103829
Tebaldi C, Ranasinghe R, Vousdoukas M, Rasmussen DJ, Vega-Westhoff BA, Kirezci E, Kopp RE, Sriver RL, Mentaschi L (2021) Extreme sea levels at different global warming levels. Nat Clim Chang 11(9):746–751. https://doi.org/10.1038/s41558-021-01127-1
Tu Q, Mo J, Liu Z, Gong C, Fan Y (2021) Using green finance to counteract the adverse effects of COVID-19 pandemic on renewable energy investment-the case of offshore wind power in China. Energy Policy 158:112542. https://doi.org/10.1016/j.enpol.2021.112542
Vásquez-Ordóñez LR, Lassala C, Ulrich K, Ribeiro-Navarrete S (2023) Efficiency factors in the financing of renewable energy projects through crowdlending. J Bus Res 155:113389. https://doi.org/10.1016/j.jbusres.2022.113389
Vural G (2021) Analyzing the impacts of economic growth, pollution, technological innovation and trade on renewable energy production in selected Latin American countries. Renew Energy 171:210–216. https://doi.org/10.1016/j.renene.2021.02.072
Wang H, Guo J (2022) Impacts of digital inclusive finance on CO2 emissions from a spatial perspective: evidence from 272 cities in China. J Clean Prod 355:131618. https://doi.org/10.1016/j.jclepro.2022.131618
Wang J, Zhang S, Zhang Q (2021) The relationship of renewable energy consumption to financial development and economic growth in China. Renew Energy 170:897–904. https://doi.org/10.1016/j.renene.2021.02.038
Wang W, Gao P, Wang J (2023a) Nexus among digital inclusive finance and carbon neutrality: evidence from company-level panel data analysis. Resour Policy 80:103201. https://doi.org/10.1016/j.resourpol.2022.103201
Wang Y, Wu Q, Razi U (2023b) Drivers and mitigants of resources consumption in China: discovering the role of digital finance and environmental regulations. Resour Policy 80:103180. https://doi.org/10.1016/j.resourpol.2022.103180
Wei X, Mohsin M, Zhang Q (2022) Role of foreign direct investment and economic growth in renewable energy development. Renew Energy 192:828–837. https://doi.org/10.1016/j.renene.2022.04.062
Wu Y, Huang S (2022) The effects of digital finance and financial constraint on financial performance: firm-level evidence from China’s new energy enterprises. Energy Econ 112:106158. https://doi.org/10.1016/j.eneco.2022.106158
Xie X, Shen Y, Zhang H, Guo F (2018) Can digital finance promote entrepreneurship? Evidence from China. China Econ Quart 17(4):1557–1580. https://doi.org/10.13821/j.cnki.ceq.2018.03.12
Xin D, Yi Y, Du J (2022) Does digital finance promote corporate social responsibility of pollution-intensive industry? Evidence from Chinese listed companies. Environ Sci Pollut Res 29(56):85143–85159. https://doi.org/10.1007/s11356-022-21695-9
Xu J, Lv T, Hou X, Deng X, Li N, Liu F (2022) Spatiotemporal characteristics and influencing factors of renewable energy production in China: a spatial econometric analysis. Energy Economics 116:106399. https://doi.org/10.1016/j.eneco.2022.106399
Yan B, Wang F, Chen T, Liu S, Bai X (2022) Digital finance, environmental regulation and emission reduction in manufacturing industry: new evidence incorporating dynamic spatial-temporal correlation and competition. Int Rev Econ Financ 83:750–763. https://doi.org/10.1016/j.iref.2022.10.025
Yang C, Masron TA (2022) Impact of digital finance on energy efficiency in the context of green sustainable development. Sustainability 14(18):11250. https://doi.org/10.3390/su141811250
Yang J, Zhang W, Zhang Z (2016) Impacts of urbanization on renewable energy consumption in China. J Clean Prod 114:443–451. https://doi.org/10.1016/j.jclepro.2015.07.158
Yang X, He L, Xia Y, Chen Y (2019) Effect of government subsidies on renewable energy investments: the threshold effect. Energy Policy 132:156–166. https://doi.org/10.1016/j.enpol.2019.05.039
Yang G, Ding Z, Wu M, Gao M, Yue Z, Wang H (2022) Can digital finance reduce carbon emission intensity? A perspective based on factor allocation Distortions: evidence from Chinese cities. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-24748-1
Yu Y, Tang K (2023) Does financial inclusion improve energy efficiency? Technol Forecast Soc Chang 186:122110. https://doi.org/10.1016/j.techfore.2022.122110
Yu H, Wei W, Li J, Li Y (2022a) The impact of green digital finance on energy resources and climate change mitigation in carbon neutrality: case of 60 economies. Resour Policy 79:103116. https://doi.org/10.1016/j.resourpol.2022.103116
Yu M, Tsai FS, Jin H, Zhang H (2022b) Digital finance and renewable energy consumption: evidence from China. Finan Innov 8(1) https://doi.org/10.1186/s40854-022-00362-5
Yuan H, Feng Y, Lee JH, Liu H, Li R (2020) The spatial threshold effect and its regional boundary of financial agglomeration on green development: a case study in China. J Clean Prod 244:118670. https://doi.org/10.1016/j.jclepro.2019.118670
Zhang M, Liu Y (2022) Influence of digital finance and green technology innovation on China’s carbon emission efficiency: empirical analysis based on spatial metrology. Sci Total Environ 838:156463. https://doi.org/10.1016/j.scitotenv.2022.156463
Zhang M, Ge Y, Liu L, Zhou D (2022) Impacts of carbon emission trading schemes on the development of renewable energy in China: spatial spillover and mediation paths. Sustain Prod Consumpt 32:306–317. https://doi.org/10.1016/j.spc.2022.04.021
Zhong S, Li A, Wu J (2022) How does digital finance affect environmental total factor productivity: a comprehensive analysis based on econometric model. Environ Dev 44:100759. https://doi.org/10.1016/j.envdev.2022.100759
Zhong S, Peng L, Li J, Li G, Ma C (2023) Digital finance and the two-dimensional logic of industrial green transformation: evidence from green transformation of efficiency and structure. J Clean Prod 406:137078. https://doi.org/10.1016/j.jclepro.2023.137078
Funding
We acknowledge the financial support from the National Natural Science Foundation of China (No. 72021001).
Author information
Authors and Affiliations
Contributions
WL: data curation, methodology, writing original draft, and software. YF: conceptualization, investigation, formal analysis, supervision, project administration, and funding acquisition. ZS: supervision, writing, reviewing, and editing. LF: writing, reviewing, and editing.
Corresponding author
Ethics declarations
Ethical approval
Not applicable.
Consent to participate
Not applicable.
Consent for publication
Written informed consent for publication was obtained from all participants.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Nicholas Apergis
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Li, W., Fan, Y., Sun, Z. et al. The role of digital finance for the growth of renewable energy: evidence from China. Environ Sci Pollut Res 31, 14641–14661 (2024). https://doi.org/10.1007/s11356-023-31704-0
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-023-31704-0