Is digital finance environmentally friendly in China? Evidence from shared-bike trips

As a green travel method, shared bikes have penetrated all aspects of residents’ daily lives; however, few studies have examined the role of digital finance in shared-bike trips, particularly in China, where digital finance tools are widely adopted. Using nationally representative data from the China Household Finance Survey (CHFS), we find that digital finance can significantly promote shared-bike trips of Chinese residents, indicating that digital finance is indeed environmentally friendly in terms of green travel behavior. In particular, the results suggest that a one standard deviation increase in digital finance increases the probability of riding shared bikes by 0.1468 standard deviations. The baseline results remain robust after using the instrumental variable approach to control potential endogeneity. Furthermore, we provide evidence that this positive effect of digital finance is likely to be explained by payment convenience, credit services, and social interactions. By stimulating shared-bike trips, digital finance further reduces the possibility of people using private cars. Moreover, the heterogeneous analysis shows inclusive attributes of digital finance. We find that digital finance has a significant positive effect on shared-bike trips for some socially disadvantaged groups, such as low-educated and low-income households and those living in cities with low levels of economic and financial development and digitalization. This study confirms the environment-friendly characteristics of digital finance from the particular perspective of shared bikes in China, supplementing the literature on influencing factors of shared bikes and the benefits of digital finance. Our evidence from the Chinese context provided insights for other countries to develop public policies and promote digital finance and shared bikes.