How does digital finance affect industrial transformation?

Rinat Zhanbayev and Wenchao Bu
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Rinat Zhanbayev: Faculty of Economics and Administrative Sciences, Cyprus International University, Nicosia, Cyprus
Wenchao Bu: School of Social and Political Sciences, University of Glasgow, Glasgow, UK

Journal of Information Economics, 2023, vol. 1, issue 1, 18-30

Abstract: With the continuous advancement of technological revolution and industrial transformation, digital finance supported by big data and artificial intelligence has become an important engine for promoting carbon neutrality. We measured the industrial structure transformation index (ISU) of 30 provinces in China, and discussed the spatial spillover effect and transmission mechanism between digital finance and ISU using the spatial Durbin model. The research results demonstrate that the digital finance development can significantly improve the local ISU. Interestingly, the impact of digital finance on the ISU of adjacent areas has a significantly negative spatial spillover effect, which still exists under the different spatial weight matrix. Digital finance can improve ISU by improving green technology innovation, upgrading industrial structure, and alleviating capital allocation. We also found that the higher degree of marketization and environmental regulation can increase the positive influences of digital finance on ISU. This research proves the effectiveness of the digital finance in improving energy efficiency, and it encourages policymakers around the world to rely on digital finance to promote ecological governance and achieve high-quality economic development.

Keywords: Digital finance; Industrial structure transformation; Threshold model; Spatial correlation; China (search for similar items in EconPapers)
Date: 2023
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