Intra-industry or spatial spillovers: Empirical study on the impact of digital finance on green energy innovation

Abstract

As global climate change intensifies, programs to promote green energy innovation are becoming increasingly urgent for humanity. However, academic debate on whether to prioritize industrial or regional policies continues, detracting the focus from programmes to promote green energy innovation. Using data from 3456 listed companies in China in 2020, this study aims to test intra-industry and spatial spillovers to provide empirical evidence to resolve the academic debate and investigate the impact of urban digital finance on corporate green energy innovation to assess the effectiveness of urban policies. Results show that firms' green energy innovations have significant intra-industry spillovers, but no significant spatial spillovers. Moreover, urban digital finance contributes significantly to green energy innovation. The impact of urban digital finance on green energy innovation varies by a firm's nature, internal controls, and external audits. Therefore, this study proposes a multilevel ecosystem for green energy innovation that theoretically supports a comprehensive and systematic understanding of corporate green energy innovation and guidelines for the precise implementation of policy portfolios.