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How does fintech influence carbon emissions: Evidence from China's prefecture-level cities

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  • Cheng, Xiaoqiang
  • Yao, Dingjun
  • Qian, Yuanyuan
  • Wang, Bin
  • Zhang, Deliang
Abstract
We investigate how fintech development affects carbon emissions using the panel data of 253 prefecture-level cities in China from 2011 to 2019. We employ the city-level digital financial inclusion index to gauge the fintech development and identify the impact mechanisms through which fintech affects the city's carbon emissions. Our results show that fintech can significantly reduce carbon emissions, and this conclusion still holds when considering potential endogeneity, when considering the impact of resource endowment, when using alternative measures of carbon emissions, even after removing the impact of low-carbon pilot cities policy, and after winsorization treatment. We further find that the main mechanisms by which fintech affects carbon emissions are industrial structure, financing constraints, and green technology innovation. Our results provide powerful evidence that fintech positively impacts the real economy, offering more confidence and reason to stimulate fintech development.

Suggested Citation

  • Cheng, Xiaoqiang & Yao, Dingjun & Qian, Yuanyuan & Wang, Bin & Zhang, Deliang, 2023. "How does fintech influence carbon emissions: Evidence from China's prefecture-level cities," International Review of Financial Analysis, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:finana:v:87:y:2023:i:c:s1057521923001710
    DOI: 10.1016/j.irfa.2023.102655
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    More about this item

    Keywords

    Fintech; Industrial structure; Financing constraints; Green technology innovation; Carbon emissions;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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