How does FinTech affect power consumption intensity in China?

Xiaohui Chen, Hongwei Zhang and Xiang Cheng

The Quarterly Review of Economics and Finance, 2025, vol. 102, issue C

Abstract: Promoting the decarbonization of the economy and society is an integral component of achieving high-quality development. While the rapid advancement of financial technology (FinTech) has played a crucial role in shaping the economic and social development model, its impact on decarbonization has received limited attention in previous studies. To address this gap, this study establishes a partial theoretical equilibrium analysis framework and computes provincial FinTech development indices for Chinese provinces spanning from 2008 to 2022. Subsequently, we empirically examine the impact of FinTech on power consumption intensity. This study observes that FinTech possesses the capacity to diminish power consumption intensity, with this intensity progressively declining as FinTech advancements occur. Notably, FinTech’s impact on loan growth serves as a pivotal intermediary in reducing power consumption intensity. By fostering a risk-friendly environment for banks, FinTech stimulates increased loan growth, thereby alleviating the financial strain on electricity providers and subsequently reducing power usage intensity. This study not only contributes to practical applications but also enriches our understanding of the intricate interplay between FinTech and power consumption, shedding light on the potential for decarbonization within the economy and society.

Keywords: FinTech; Risk-taking level; Power consumption intensity; Loan growth (search for similar items in EconPapers)
JEL-codes: C46 C50 E60 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:102:y:2025:i:c:s1062976925000584

DOI: 10.1016/j.qref.2025.102017

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