How does fintech affect energy transition: Evidence from Chinese industrial firms

Abstract

This article constructs a dataset of Chinese industrial firms between 2005 and 2010 to investigate the influence of fintech developments on the coal consumption of Chinese firms. Results reveal a significant negative correlation between Fintech and firms' coal consumption. By addressing the potential endogeneity, controlling city-level variables and interactive fixed effects, and testing the unobservable bias, the benchmark results are robust to the above alternative identification strategies. Furthermore, this article investigates the potential mechanisms and finds that Fintech can be negatively connected with coal consumption at firms by elevating export and innovation performance. Finally, this article examines the heterogeneous effects of fintech development and discovers the reduction effect of fintech development on the coal consumption of firms, which is greater for young firms located in the central and eastern regions as well as for those located in regions with lower GDP growth, lower development of the tertiary sector, and a higher level of financial development. The results may contribute to China's carbon neutrality goal by 2060 and help policymakers make policies in the energy sector.