The impact of digital finance on pollutants emission: evidence from chinese cities

Jiayu Wan, Zhengning Pu and Christophe Tavera ()
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Jiayu Wan: Southeast University [Jiangsu]
Zhengning Pu: Southeast University [Jiangsu]
Christophe Tavera: UR - Université de Rennes, CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper investigates whether emerging digital finance can reduce environmental pollution in China based on data from 273 of China's prefecture-level cities spanning the period from 2010 to 2017. The dynamic spatial econometric models (DSDM) find a significant negative association between digital finance and pollutants emissions, and the impacts vary among regions and urban development stages. The impact mechanism test proves that digital finance reduces pollutants emissions through technological innovation, structural adjustment, and capital allocation effects. In addition, we explore the different dimensions of digital finance and find that the depth of use has a more practical effect on reducing emissions. Further analyses based on the threshold model show an inverted N-shaped nexus between digital finance and emissions. The threshold effect also exists in terms of the traditional financial level. Our study proves that emerging digital finance crucially affects its potential benefits to environment and provides an empirical basis for policy-makers to accelerate the digitalization of financial markets, particularly paying attention to its emission-reduction effects.

Keywords: Digital finance; Pollutants emissions; Dynamic spatial panel model; Mechanism test; Threshold effect; Prefecture-level cities (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

Published in Environmental Science and Pollution Research, 2022, ⟨10.1007/s11356-021-18465-4⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03554233

DOI: 10.1007/s11356-021-18465-4

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