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Digital financial inclusion and energy-environment performance: What can learn from China.
- Source :
-
Structural Change & Economic Dynamics . Dec2022, Vol. 63, p342-366. 25p. - Publication Year :
- 2022
-
Abstract
- • We theoretically analysis and empirically examine the causal relationship between DFI and EEP. • DFI has a solid U-shaped impact on the EEP instead of a linear one. • A battery of robustness and endogeneity checks supports our conjecture. • Household consumption stimulation and green innovation promotion are two plausible economic channels to explain this U-effect. • Rich implications are provided to advance sustainable development with digital financial policies. Digital financial inclusion (DFI) is newly cited as a significant driver of sustainable development in developing and transition economies, and it is thus likely that DFI affects energy-environment performance (EEP). Here, different from recent studies documenting monotonic links between them, we first theoretically reconcile the underlying U-shaped impact of DFI on EEP using two competing hypotheses: consumption stimulation versus innovation promotion effect. Subsequently, we extend non-radial direction distance function specifications within a biennial data envelopment analysis framework to assess EEP, and then re-examine the causal relationship between DFI and EEP using panel data covering 282 prefecture-level cities in China during 2011–2019. The empirical results show that DFI has a solid U-shaped impact on the EEP instead of a linear one. This effect holds up to various robustness and endogeneity checks, including the spatial econometric approach that captures cross-sectional dependence, the geographical distance as an instrument variable, the dynamic threshold regression approach, and the difference-in-difference approach. Further mechanism tests show that household consumption stimulation and green innovation promotion are two plausible economic channels to explain this U-effect, supporting our theoretical conjecture. Moreover, the U-effect is more pronounced for cities with relatively low levels of economic development and environmental regulation, including central and western cities, as well as smaller, non-low-carbon pilot and non-carbon emission trading pilot cities. However, we find that the U-effect is disproportionately stronger in southern cities with higher financial marketization levels than in northern cities. Overall, these findings shed more lights on the DFI-EEP nexus and provide new insights into understanding the real effects of DFI on sustainable development. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 0954349X
- Volume :
- 63
- Database :
- Academic Search Index
- Journal :
- Structural Change & Economic Dynamics
- Publication Type :
- Academic Journal
- Accession number :
- 160365931
- Full Text :
- https://doi.org/10.1016/j.strueco.2022.10.007