The influencing mechanism of financial development on CO2 emissions in China: double moderating effect of technological innovation and fossil energy dependence

Feng Xiong, Leizhen Zang (), David Feng and Jinhua Chen ()
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Feng Xiong: Chongqing University of Posts and Telecommunications
Leizhen Zang: China Agricultural University
David Feng: China Agricultural University
Jinhua Chen: The Institute of Regional Governance, Soochow University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2023, vol. 25, issue 6, No 6, 4933 pages

Abstract: Abstract It has been a crucial challenge for countries worldwide to reduce carbon dioxide (CO2) emissions. China is developing policies among various industries to peak CO2 emissions as soon as possible and expects the reduction of CO2 emissions through financial development. This paper explores the influencing mechanism of financial development on CO2 emissions based on panel data from provinces in China, considering constraints of technological innovation and fossil energy dependence among provinces and periods. Empirical results consistently indicate that the effect of China's financial development on CO2 emissions per capita is significantly negative, and it also presents an inverted U-shaped pattern. In those provinces or periods witnessing lower technological innovation and higher fossil energy dependence, the financial development has more significant effect on carbon emission reduction. This result suggests that regions with deficiencies in the development of technology industries, lower proportions of the tertiary industry, and a higher percentage of the secondary industry need to focus more on the value of financial development.

Keywords: Financial development; Moderating effect; Carbon emission; Technological innovation; Fossil energy dependence (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10668-022-02250-5

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