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Can digital-empowered green finance enhance energy efficiency? Empirical evidence from China

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  • Jinyue Zhang

    (Northeastern University)

  • Zhenglin Sun

    (Northeastern University)

Abstract

In the context of digital technologies deeply empowering the real economy, the integration of green finance and digitalization has effectively driven the green transformation and efficient use of energy. Using the urban panel data from 2011 to 2022, this study explores the multi-dimensional impacts of digital-empowered green finance on energy efficiency from the perspectives of a dual explanatory variable approach, namely the development of green finance and the policies of green finance pilot zones, and a dual explained variable approach, namely pure energy efficiency and green total-factor energy efficiency. Research shows that: (1) Digitally empowered green finance can significantly enhance energy efficiency. The coordinated implementation of the establishment of the “Big Data Bureau” and green finance policies can also notably improve energy efficiency. (2) Digitally empowered green finance development significantly promotes energy efficiency in the east, resource-based cities, and heavy-polluting industries. The two-policy co-implementation also shows a significant boost in both eastern and western regions, resource-based cities, and heavy-polluting industries. (3) With the strengthening of financial agglomeration and the tightening of environmental regulation, digitally empowered green finance can significantly improve energy efficiency, yet this improvement shows the law of diminishing marginal returns. (4) The development of digitally empowered green finance exhibits a significant positive spatial spillover effect on the improvement of energy efficiency. This study provides empirical evidence from China for the continued promotion of digital empowerment, the expansion of the scope of the green finance pilot zone policies, and the exploration of the drivers of energy-saving effects. Graphical abstract

Suggested Citation

  • Jinyue Zhang & Zhenglin Sun, 2025. "Can digital-empowered green finance enhance energy efficiency? Empirical evidence from China," Economic Change and Restructuring, Springer, vol. 58(4), pages 1-67, August.
    • Handle: RePEc:kap:ecopln:v:58:y:2025:i:4:d:10.1007_s10644-025-09897-w
    DOI: 10.1007/s10644-025-09897-w
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