How financial technology affects energy transformation in China

Malin Song, Huanyu Zheng, Zhiyang Shen and Boyang Chen

Technological Forecasting and Social Change, 2023, vol. 188, issue C

Abstract: Energy transformation is a crucial means of China's commitment response to climate change. However, the renewable energy market has the characteristics of long-term return, high financing constraints, and relies on the support of an effective financial system. Using panel data from 30 provinces in China from 2006 to 2018, this study uses a panel vector autoregressive model to explain the bidirectional causal relationship between innovative financial instruments and the development of renewable energy. There are also significant spatial and temporal correlations between them. At the same time, the degree of industrialization, carbon emissions, and population density also have a positive impact on renewable energy. In contrast, GDP per capita and urbanization have significant negative impacts on renewable energy. In the end, this study suggests that the government should actively promote modern financial technologies (e.g. green financing) for developing renewable energy to achieve sustainability goals. Financial institutions should further increase green credit support for the renewable energy industry.

Keywords: Green finance; Renewable energy; Energy market; Vector autoregressive model (search for similar items in EconPapers)
JEL-codes: O13 Q40 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:188:y:2023:i:c:s0040162522007806

DOI: 10.1016/j.techfore.2022.122259

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