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Digital Finance and County Ecological Performance—New Evidence from China Counties

Author

Listed:
  • Hui Yuan

    (Rural Development Institute, Yan’an University, Yan’an 716000, China)

  • Wei Cen

    (Rural Development Institute, Yan’an University, Yan’an 716000, China
    HSBC Business School, Peking University, Shenzhen 518055, China)

  • Tao Du

    (Rural Development Institute, Yan’an University, Yan’an 716000, China
    College of Economics and Management, Yan’an University, Yan’an 716000, China)

Abstract

As a new product that combines finance and digital technology, digital finance is of great significance to the governance of the ecological environment. Based on the panel data of 2128 counties in China from 2014 to 2020, the fixed effect model and a panel threshold model are established, and the direct impact, heterogeneity, and transmission paths of digital finance development on ecological environment quality are empirically analyzed. The results demonstrate that the progress of digital finance has a significant negative effect on ecological environmental performance, and robustness tests support this conclusion. Additionally, industrial agglomeration and structural transformation are crucial mechanisms through which digital finance hinders ecological environmental performance. Moreover, the adverse influence of digital finance development on the ecological environment is particularly pronounced in densely populated areas, county-level cities, and non-poverty-stricken counties. Fourthly, based on the development level of digital finance itself, digital finance has a double threshold effect on the performance of county ecological environment. When digital finance is at a low level and a high level, its negative impact on eco-environmental performance is the greatest. Between the low level and the high level of digital finance, digital finance has the greatest negative impact on the performance of the ecological environment. Finally, suggestions are put forward to promote the green development of digital finance, foster balanced regional development, and expedite industrial transformation in underdeveloped regions.

Suggested Citation

  • Hui Yuan & Wei Cen & Tao Du, 2023. "Digital Finance and County Ecological Performance—New Evidence from China Counties," Sustainability, MDPI, vol. 15(24), pages 1-21, December.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:24:p:16691-:d:1296899
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    References listed on IDEAS

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