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Driving low-carbon energy transition with FinTech: The role of government environmental attention

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  • Wu, Xiuqin
  • Zhang, Yi
  • Lee, Chi-Chuan

Abstract

Shifting from fossil fuels to clean/renewable energy has become imperative to address global warming. Nevertheless, the energy transition necessitates harmonizing energy systems with sustainable development goals, with sufficient financing and financial innovation being crucial components. This study explores whether and how FinTech development affects low-carbon energy transition (LCET) using data from 278 prefecture-level cities in China. The results demonstrate that FinTech can enhance urban LCET, and a spatial spillover effect exists from this influence. This conclusion remains robust after substituting key variables, adjusting the model setting, and mitigating endogeneity. The findings of the mechanism analyses reveal that the main channels through which FinTech promotes LCET are green technology innovation, industrial enhancement, and green finance. The heterogeneity analysis indicates that FinTech exerts a more significant influence in areas characterized by elevated levels of traditional finance and marketization. Additionally, the government's environmental attention positively influences and demonstrates a considerable threshold effect on the nexus between FinTech and LCET. This indicates that governments are crucial in directing financial resources towards low-carbon sectors.

Suggested Citation

  • Wu, Xiuqin & Zhang, Yi & Lee, Chi-Chuan, 2025. "Driving low-carbon energy transition with FinTech: The role of government environmental attention," Energy, Elsevier, vol. 330(C).
    • Handle: RePEc:eee:energy:v:330:y:2025:i:c:s0360544225026350
    DOI: 10.1016/j.energy.2025.136993
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    Keywords

    FinTech; Low-carbon energy transition; Government environmental attention; China;
    All these keywords.

    JEL classification:

    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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