Digital Inclusive Finance, Digital Technology Innovation, and Carbon Emission Intensity

Abstract

Decreasing carbon emission intensity (CEI) has emerged as a crucial strategy for nations to attain low-carbon economic growth. Nevertheless, a definitive conclusion about the correlation between financial development and CEI has not been reached. This research examines the influence of digital inclusive finance (DIF), a novel financial sector, on CEI, and the role of digital technology innovation (DTI) in this impact. Firstly, this study analyzes the influence of DIF on CEI from the perspectives of technology effect and scale effect and proposes the hypothesis that the impact of DIF on CEI is U-shaped. Then, using a double fixed-effect model and a sample of 30 provinces in China from 2011 to 2021, this study verifies the accuracy of the hypothesis. Subsequently, this study examines the mechanism by which DIF impacts CEI, and the results indicate that DIF can exert a U-shaped influence on CEI via enhancing DTI. Then, this study further investigates the impact of DIF on CEI from three angles: geographical location, human capital level, and green finance. It also explores the geographical spillover effect and spatial heterogeneity by employing the Durbin model. Lastly, drawing from the aforementioned analysis, this report proposes some recommendations.