Asymmetric influence of digital finance, and renewable energy technology innovation on green growth in China

Abstract

This study examines the influence of digital finance and renewable energy technology innovation (RETI) on green growth using Chinese regional data from 2007 to 2019. It applies Method of Moments Quantile Regression (MMQR) to integrate asymmetric green growth patterns in China's prefecture-level regions. Moreover, the generalized method of moment (GMM) is used to address possible endogeneity between model variables. The results of MMQR reveal that digital finance stimulates green growth at middle to higher quantiles (4th to 6th), and central and eastern regions fall within these quantiles. In contrast, western regions have an insignificant impact as prescribed by lower quantiles (1st to 3rd). Similarly, RETI failed to increase the growth across lower to middle (1st to 6th) quantiles in western and central regions. However, the extremely high quantiles indicate a significantly positive connection, demonstrating that RETI contributes to green growth primarily in eastern regions. Moreover, the outcomes stated that government intervention significantly enhances green growth throughout quantiles. The results from GMM endorse a similar outcome, indicating that the marginal contribution of digital green finance towards green growth is more substantial in the eastern sub-sample, followed by central and western regions, respectively. Likewise, green growth is more responsive to changes in RETI in eastern and western regions. These results suggest that digital finance and RETI are imperative to ensure regional green growth; however, their marginal contribution should be improved in western and eastern regions.