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How does digital inclusive finance affect carbon intensity?

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  • Lee, Chien-Chiang
  • Wang, Fuhao

Abstract

This research explores a new way to reduce carbon intensity based on the perspective of digital inclusive finance. Taking panel data of 277 cities in China from 2011 to 2017, we employ different econometric models to comprehensively analyze and demonstrate the impact of digital inclusive finance on carbon intensity. The results show that digital inclusive finance can directly reduce carbon intensity, and through optimizing the industrial structure and promoting green technology it can also affect carbon intensity. Next, we show that good technological environment, a certain economic scale, and openness are preconditions for this effect. According to the spatial Dubin model, digital inclusive finance has a spatial effect on carbon intensity, and the spillover boundary range is between 350km and 400km. Moreover, the results contend that the promulgation of green-credit policy is beneficial to cutting down carbon intensity. Lastly, we perform a series of robustness tests involving endogeneity, sample selection bias, adding control variables, and winsorizing at different quantile, which strengthen the reliability of the study’s basic conclusion.

Suggested Citation

  • Lee, Chien-Chiang & Wang, Fuhao, 2022. "How does digital inclusive finance affect carbon intensity?," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 174-190.
    • Handle: RePEc:eee:ecanpo:v:75:y:2022:i:c:p:174-190
    DOI: 10.1016/j.eap.2022.05.010
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