Influence of digital finance and green technology innovation on China's carbon emission efficiency: Empirical analysis based on spatial metrology

Abstract

The carbon emission efficiency can be employed to estimate the reduction of carbon emissions and sustainable economic development. Carbon emission efficiency is believed to be affected significantly by green technology innovation. In terms of promoting green technology innovation, digital finance enhances the contribution of traditional finance due to its information-based nature. Then, exploring how digital finance and green technology innovation affect carbon emission efficiency will assist in formulating effective policies. Employing the panel data of 285 city samples in China from 2011 to 2017, this study employed the improved NDDF (non-radial directional distance function) to calculate the urban carbon emission efficiency and applied the spatial econometric model to empirically analyze the impact of digital finance and green technology innovation on carbon emission efficiency. Empirical results demonstrate carbon emission efficiency has a significant spatial correlation, and neighboring cities have a spillover effect on local carbon emission efficiency. The synergistic effect of digital finance and green technological innovation plays a significant role in promoting local carbon emission efficiency but suppresses carbon emission efficiency in surrounding cities to some extent. Additionally, the synergy varies based on the city's carbon emission efficiency. Consequently, China should strengthen the integration of digital finance and green technology, and formulate supporting policies and measures according to local conditions to improve the urban carbon emission efficiency, so as to provide the theoretical basis and practical experience for achieving China's goal of “carbon neutralization”.