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Does Fintech improve the carbon reduction effect of green credit policy? Evidence from China

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  • Wan, Jiayu
  • Niu, Zihan
  • Li, Bin

Abstract

Technological advancements have driven financial innovation, improving market efficiency and demonstrating potential to enhance the effectiveness of green credit policies. Although extensive research has explored the impacts of green finance policies, few studies have investigated the role of Fintech in shaping these effects. This study employs panel data from Chinese-listed companies between 2007 and 2021 to analyze how Fintech reinforces the carbon reduction impact of green credit policies. Our findings reveal that Fintech significantly amplifies these outcomes by improving information quality in the pre-loan phase, easing funding constraints during the lending phase, and ensuring targeted environmental use of funds in the post-loan phase. Additionally, we identify conditions that optimize Fintech's effectiveness, such as firms’ political connections, the economic development levels of their regions, and the degree of marketization. These results underscore Fintech's potential in facilitating inclusive low-carbon transitions and provide valuable insights for enhancing green finance strategies.

Suggested Citation

  • Wan, Jiayu & Niu, Zihan & Li, Bin, 2025. "Does Fintech improve the carbon reduction effect of green credit policy? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1258-1269.
    • Handle: RePEc:eee:ecanpo:v:85:y:2025:i:c:p:1258-1269
    DOI: 10.1016/j.eap.2025.01.016
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    Cited by:

    1. Mei, Kailong & Zhang, Zihao, 2025. "Environmental regulation, green investment and corporate green governance: Evidence from China's New Environmental Protection Law," Finance Research Letters, Elsevier, vol. 76(C).

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