The Impact of Financial System on Carbon Intensity: From the Perspective of Digitalization

Abstract

Financial system reforms are important for developing regions in the period of structural transformation. In the face of climate change, which is an important issue for all mankind. This paper empirically explores the impact of financial structure on carbon intensity based on China’s provincial level data from 2005 to 2019, and discusses the intermediary effect of digitalization. The results show that: (1) Market leading financial system can significantly reduce the carbon intensity, which is more prominent in Northeast China. (2) The improvement of the digital level has accelerated the development of financial marketization and helped to reduce the carbon intensity. (3) The construction of digital talents and digital infrastructure have partial intermediary effects between market leading financial system and carbon intensity. However, there is no intermediary effect in the construction of digital ecological environment. This paper provides empirical research on the environmental effects of market leading financial system, which is helpful to the construction of green finance and digital financial system, and contributes to the market transformation of the financial system in China.