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Digital finance and the energy transition: Evidence from Chinese prefecture-level cities

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  • Wang, Zongrun
  • Cao, Xuxin
  • Ren, Xiaohang
  • Gozgor, Giray

Abstract

The increasing digitalisation of the financial sector can potentially steer cities towards carbon neutrality, especially through digital finance. We conduct a panel data analysis of Chinese prefecture-level cities from 2014 to 2020 using a spatial econometric model to explore the effect of digital finance on energy transition. Further, we explore the spatial spillover effect and its moderating mechanism. Our results confirm a significant positive correlation between digital finance and energy transition efficiency. Moreover, digital finance is found to engender positive spatial spillover effects on energy transition in neighbouring cities. Finally, the analysis of the moderating effect reveals that digital economy policies can amplify the positive correlation between digital finance and energy transition. This finding highlights the importance and positive role of digital finance in realising energy transition.

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  • Wang, Zongrun & Cao, Xuxin & Ren, Xiaohang & Gozgor, Giray, 2024. "Digital finance and the energy transition: Evidence from Chinese prefecture-level cities," Global Finance Journal, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:glofin:v:61:y:2024:i:c:s1044028324000590
    DOI: 10.1016/j.gfj.2024.100987
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    3. Qi Cui & Xiaoyu Ma & Sisi Zhang, 2025. "The impact of green finance on energy saving and carbon reduction: evidence from Chinese cities," Economic Change and Restructuring, Springer, vol. 58(1), pages 1-33, February.
    4. Wang, Jianda & Lyu, Weijian & Chen, Xi & Yang, Senmiao & Dong, Xiucheng, 2024. "Navigating total-factor carbon emission efficiency in the digital era: A case study from industry structure, environmental regulations, and trade spillover," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 260-277.
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    10. Hamdi Becha & Maha Kalai & Saifeddine Houidi & Kamel Helali, 2025. "Digital financial inclusion, environmental sustainability and regional economic growth in China: insights from a panel threshold model," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 14(1), pages 1-40, December.
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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

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