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The influencing mechanism of financial development on CO2 emissions in China: double moderating effect of technological innovation and fossil energy dependence

Author

Listed:
  • Feng Xiong

    (Chongqing University of Posts and Telecommunications)

  • Leizhen Zang

    (China Agricultural University
    Peking University)

  • David Feng

    (China Agricultural University)

  • Jinhua Chen

    (The Institute of Regional Governance, Soochow University)

Abstract

It has been a crucial challenge for countries worldwide to reduce carbon dioxide (CO2) emissions. China is developing policies among various industries to peak CO2 emissions as soon as possible and expects the reduction of CO2 emissions through financial development. This paper explores the influencing mechanism of financial development on CO2 emissions based on panel data from provinces in China, considering constraints of technological innovation and fossil energy dependence among provinces and periods. Empirical results consistently indicate that the effect of China's financial development on CO2 emissions per capita is significantly negative, and it also presents an inverted U-shaped pattern. In those provinces or periods witnessing lower technological innovation and higher fossil energy dependence, the financial development has more significant effect on carbon emission reduction. This result suggests that regions with deficiencies in the development of technology industries, lower proportions of the tertiary industry, and a higher percentage of the secondary industry need to focus more on the value of financial development.

Suggested Citation

  • Feng Xiong & Leizhen Zang & David Feng & Jinhua Chen, 2023. "The influencing mechanism of financial development on CO2 emissions in China: double moderating effect of technological innovation and fossil energy dependence," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 4911-4933, June.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:6:d:10.1007_s10668-022-02250-5
    DOI: 10.1007/s10668-022-02250-5
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