Digital finance and renewable energy consumption: evidence from China

While digital finance and renewable energy consumption (REC) are two timely issues, it remains unclear whether the former affects the latter, especially in developing economies. This paper examines the impact of digital finance on China’s REC between 2011 and 2018 and explores the underlying mechani...

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Bibliographic Details
Published in:Financial innovation (Heidelberg) 2022-05, Vol.8 (1), p.1-19, Article 58
Main Authors: Yu, Minli, Tsai, Fu-Sheng, Jin, Hui, Zhang, Hejie
Format: Article
Language:English
Subjects:
Blockchain and Digital Finance
Developing countries
Developing economy
Digital finance
Economic development
Economic growth
Economics
Economics and Finance
Energy consumption
LDCs
Macroeconomics/Monetary Economics//Financial Economics
Political Economy/Economic Systems
Renewable energy consumption
Renewable resources
Sustainability
Sustainability management
Two-way fixed effects model
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Summary:While digital finance and renewable energy consumption (REC) are two timely issues, it remains unclear whether the former affects the latter, especially in developing economies. This paper examines the impact of digital finance on China’s REC between 2011 and 2018 and explores the underlying mechanisms. Results show that digital finance, along with its coverage breadth and usage depth, significantly improved REC in China and that digital finance in the area of credit has had the most significant impact. Additionally, the results show that loan scale and income level are the main mediation variables, through which digital finance affects REC. The findings also suggest that economic growth and technological progress have increased REC in China, while carbon dioxide emissions have had no meaningful effect on this consumption. The results further indicate that policymakers must pay close attention to the role of digital finance when formulating policies on REC. To promote REC and environmental sustainability, developing economies like China should strengthen the breadth and depth of digital finance development, focus on the influence channels of digital finance, and promote economic growth and technological progress.
ISSN:2199-4730
2199-4730
DOI:10.1186/s40854-022-00362-5