Blessing or curse? Fintech adoption and greenhouse gas emission intensity

This study investigates the role of fintech adoption in shaping greenhouse gas (GHG) emissions. Exploiting China's setting and using panel data from 2400 observations and 281 prefecture-level cities in China from 2011 to 2019, we find that adopting fintech significantly reduces CO₂ and SO₂ emissions. Further analyses identify the underlying mechanisms as enhanced green innovation and increased fiscal transparency, which strengthen the ability of regions to protect the environment through public governance. To address the potential endogeneity issues arising from non-randomness and the non-exogenous shock of fintech adoption, we employ two novel instrumental variables as the geographical distance of the city to Hangzhou and the number of graduates to re-estimate our baseline results, which yield similar findings. We further find that this effect is more pronounced in regions with better Internet access and less intensive environmental regulations. Moreover, emissions reductions achieved from fintech adoption generate positive economic and social impacts.