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Financial Inclusion through Digitalization: Improving Emerging Drivers of Industrial Pollution—Evidence from China

Author

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  • Mingzhao Xiong

    (Post Graduate Centre, Management and Science University, Shah Alam 40100, Malaysia
    School of Economics and Trade, Henan University of Technology, Zhengzhou 450001, China)

  • Wenqi Li

    (School of Economics and Trade, Henan University of Technology, Zhengzhou 450001, China)

  • Chenjie Jenny

    (Post Graduate Centre, Management and Science University, Shah Alam 40100, Malaysia)

  • Peixu Wang

    (Post Graduate Centre, Management and Science University, Shah Alam 40100, Malaysia)

Abstract

As an emerging product of the coupling of digital technique and traditional finance, digital inclusive finance (DIF) may play a vital role in alleviating the contradiction between economic growth and environmental contamination. This paper utilises the panel data from various provinces in China as a sample to empirically test the effect of DIF on industrial pollution. The study found that (1) DIF and its sub-dimension coverage (DIF_B) and depth of use (DIF_D) have significant governance effects on industrial pollution, and the conclusion remains valid even when endogeneity is considered; (2) the mediation effect test found that the upgrading of the industrial structure and the degree of technological innovation are important transmission paths for DIF to reduce industrial pollution; (3) the heterogeneity test found that the effect of DIF on industrial pollution control successively showed a pattern of weakening in the centre, eastern, and western regions, while the treatment effect of DIF on industrial wastewater is better than that of industrial waste gas, and the effect on industrial solid pollutant emissions has a U-shaped non-linear relation that is first suppressed and then promoted; (4) the threshold effect test found that DIF, DIF_B, and DIF_D all have a double threshold effect on industrial pollution. Based on the empirical outcomes, this paper proposes measures to improve the development mechanism of DIF, formulate differentiated monetary support and oversight policies under local conditions, and build and enhance the supervision mechanism of the digital financial industry and prevent systemic risks.

Suggested Citation

  • Mingzhao Xiong & Wenqi Li & Chenjie Jenny & Peixu Wang, 2023. "Financial Inclusion through Digitalization: Improving Emerging Drivers of Industrial Pollution—Evidence from China," Sustainability, MDPI, vol. 15(13), pages 1-17, June.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:13:p:10203-:d:1180853
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    Cited by:

    1. Ruixin Su & Tong Zheng & Yuzhao Zhong & Weizhou Zhong, 2023. "Role of Digital Inclusive Finance for High-Quality Business Development: A Study of China’s “Five Development Concept” Policy," Sustainability, MDPI, vol. 15(15), pages 1-21, August.
    2. Yang Jingyi & Guo Xiaoyang & Zhang Xiuwu, 2024. "Analysis of the Effect of Digital Financial Inclusion in Promoting Inclusive Growth: Mechanism and Statistical Verification," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 18(1), pages 1-18.
    3. Hui Yuan & Wei Cen & Tao Du, 2023. "Digital Finance and County Ecological Performance—New Evidence from China Counties," Sustainability, MDPI, vol. 15(24), pages 1-21, December.

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