How inclusive financial development eradicates energy poverty in China? The role of technological innovation

Abstract

Although numerous policies and measures in China are aimed at accelerating energy poverty eradication, few scholars have investigated the nexus between China's inclusive financial development (IFD) and energy poverty. To this end, we first evaluate the composite index of China's IFD, and then empirically investigate the energy poverty eradication effect of IFD by applying the differential generalized method of moments (Diff-GMM) technique based on the sample data of China's 30 provinces between 2004 and 2017. We also conduct an asymmetric analysis and detect the moderating and mediating roles of technical innovation in the linkage between IFD and energy poverty. The primary findings imply that: (1) improving the development of China's inclusive finance can help eradicate energy poverty, and the interaction of inclusive finance and technical innovation can strengthen this effect; (2) the energy poverty eradication effect of IFD is mainly caused by strengthening the supply of energy services and improving energy management institutions; (3) IFD and technical innovation show an asymmetric correlation with energy poverty at different quantiles; and (4) China's IFD not only directly eradicates energy poverty, but also has an indirect promotion effect on energy poverty eradication by accelerating technical innovation. We propose some policy implications related to supporting inclusive finance, strengthening technical innovation, and considering regional heterogeneity.