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ORIGINAL RESEARCH
The Impact of Digital Finance on
Carbon Emission Performance
-An Empirical Analysis of 261 Cities in China
1
Business School of Nanjing Xiaozhuang University, Nanjing 211171,China
2
School of Government Management, Shanghai University of Political Science and Law, Shanghai 201701, China
3
School of Finance, Nanjing University of Finance and Economics, Nanjing 210023, China
4
International Department of Nanjing Jinling High School, Nanjing 210095, China
Submission date: 2024-01-16
Final revision date: 2024-05-14
Acceptance date: 2024-06-12
Online publication date: 2024-11-18
Publication date: 2025-05-09
Corresponding author
Pol. J. Environ. Stud. 2025;34(4):4071-4082
KEYWORDS
TOPICS
ABSTRACT
To alleviate resource and environmental constraints and realize high-quality development, it
is inevitable for China to reach peak carbon emissions by 2023 and carbon neutrality by 2060. This
requires extensive, systematic, and profound socioeconomic reforms which are indispensable with
the strong support of digital finance. The present study investigates to what extent digital finance affects
carbon emission performance and the underlying mechanisms based on data about 261 cities in China
from 2011 to 2021. The methods include the panel regression model, the instrumental variable method,
and the mediating effect model. According to empirical results, firstly, digital finance effectively
diminishes the intensity of carbon emissions, improves carbon efficiency in three dimensions,
and ameliorates performance in carbon emissions. Secondly, digital finance decreases carbon emission
intensity, raises carbon efficiency, and improves carbon emission performance through the innovation
effect, industrial upgrading effect, and entrepreneurial effect. Thirdly, the impacts of digital finance
on the performance of carbon emissions have shown remarkable discrepancies in different regions,
with a better alleviation outcome in the central and eastern regions of China. Therefore, in the future,
the Chinese government should vigorously boost digital finance development, continue to promote
the integrated development of the real economy, financial services, and digital technologies, and keep
optimizing resource allocation to facilitate peak carbon emissions and carbon neutrality.
CONFLICT OF INTEREST
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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