Digital Inclusive Finance, Environmental Regulation, and Regional Economic Growth: An Empirical Study Based on Spatial Spillover Effect and Panel Threshold Effect

The development of digital financial inclusion has added a new vitality to economic growth, and environmental regulation is an important tool to achieve sustainable economic growth. Therefore, whether there is a synergistic effect between these two factors of economic growth is a topic worth exploring. This paper uses the space econometric model and threshold model to explore the impact of digital financial inclusion and environmental regulation on regional economic growth using panel data from 30 Chinese provinces, collected between 2011 and 2019. The research results prove that the development of digital financial inclusion and the improvement in the intensity of environmental regulation have a significant direct promotion effect and negative spatial spillover effect on regional economic growth. Moreover, the two have a significant synergistic effect on regional economic growth. A panel threshold analysis showed that, with the improvement in the level of digital financial inclusion, the regression coefficient of environmental regulation changed from negative to positive, which played a significant role in promoting regional economic growth. The heterogeneity analysis found that digital inclusive finance in eastern regions of China plays a greater role in promoting the economy, whereas environmental regulation in the central region plays a greater role in promoting the economy. The synergy between the two in the central region greatly promotes economic development. When digital inclusive finance is used as the threshold variable, environmental regulation in eastern and western regions has a single-threshold effect on regional economic development. Based upon these research results, this paper proposes that a coordination mechanism between digital financial inclusion and environmental regulation should be established to give full play to their synergies in sustainable economic growth.