Does digital inclusive finance affect urban carbon emission intensity: Evidence from 285 cities in China

Abstract

This study aims to investigate the impact of digital inclusive finance (DIF) on urban carbon emission intensity (CEI) in China using panel data from 285 Chinese cities from 2011 to 2019. The city and year fixed effects panel model and the spatial Durbin model are employed for analysis. The results reveal a gradual upward trend in DIF, while urban CEI generally exhibits a decreasing trend with some fluctuations. The empirical findings demonstrate that DIF and its branches of coverage breadth and usage depth have a significant reduction on urban CEI. Particularly, this impact mainly exits in eastern and northeastern cities, as well as cities with developed traditional finance and high levels of industrial modernization. These findings still hold after a series of robustness tests. Moreover, mechanism tests suggest that the reduction of DIF on urban CEI can be attributed to three main effects: digital infrastructure, technological innovation, and resource allocation. Furthermore, the spatial econometric analysis indicates a substantial spatial spillover effect of DIF on urban CEI, with more pronounced effects observed in cities with similar economic characteristics.