A nexus between green digital finance and green innovation under asymmetric effects on renewable energy markets: a study on Chinese green cities

The role of digital finance for the growth of renewable energy: evidence from China

Developing renewable energy (RE) is the inevitable choice for China to achieve its climate goals. However, financing RE investments remains challenging. Meanwhile, China's digital finance (DF) is profoundly influencing the trajectory of the energy transition. This study empirically investigates the role of DF on the growth of RE, what aspects of DF matter, and its geographical attenuation process, taking both spatial and temporal dimensions into consideration. The empirical results show that DF and its coverage breadth and usage depth can facilitate RE development in both local and neighboring regions, with a comparatively limited effect of digitalization level. The impact of DF on the growth of RE is heterogeneous and has been declining over time. Specifically, this effect is observable only in the eastern regions. The spillover effects of DF on RE development vary in different spatial thresholds, which has clear boundary effects and geographical decay characteristics.

Digital financial development, synergistic reduction of pollution, and carbon emissions: evidence from biased technical change

Environmental pollution control and greenhouse gas emissions reduction have become the main ecological protection issues. The digital transformation of the financial sector provides a vital opportunity to holistically promote environmental governance. This article incorporates the synergistic reduction of pollution and carbon emissions into the environmental governance system of digital financial development. Using panel data from 280 cities in China between 2011 and 2018, we examine the impact of digital financial development on the synergistic reduction of pollution and carbon emissions. We find that (1) digital finance development can significantly improve the synergistic reduction of pollution and carbon emissions, effectively lowering carbon emissions while reducing pollution. External environmental concerns can further unleash the potential for digital finance development to enhance its synergistic reduction of pollution and carbon emissions. (2) The key transmission mechanism lies in the dual guidance of digital finance development toward biased technical change, i.e., toward energy-saving elements on the input side and toward reduced pollution output on the output side, thereby inducing the synergistic reduction of pollution and carbon emissions. (3) The synergistic effect of digital finance development on pollution and carbon reduction depends on the necessary regional development endowment, such as strong green technology innovation capabilities, lower traditional financial accessibility, and carbon sink reserves. This study expands the understanding of the environmental effects of digital finance development and offers crucial insights for exploring the optimal development path under green strategies.