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FinTech and Green Credit Development—Evidence from China

Author

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  • Qian Liu

    (School of Finance, Guangdong University of Foreign Studies, 178 Waihuan East Road, Guangzhou 510006, China
    Institute of Financial Openness and Asset Management, Guangdong University of Foreign Studies, 178 Waihuan East Road, Guangzhou 510006, China
    Southern China Institute of Fortune Management Research, Guangdong University of Foreign Studies, 178 Waihuan East Road, Guangzhou 510006, China)

  • Yiheng You

    (School of Finance, Guangdong University of Foreign Studies, 178 Waihuan East Road, Guangzhou 510006, China)

Abstract

The existing literature on FinTech and green finance has primarily focused on exploring sustainable economic and environmental benefits. However, empirical research examining the effect of FinTech on green finance remains underexplored. In light of the advantageous position of green credit in the development of green finance in China, this study analyzes the impact of FinTech on green credit development using polluting listed firms in 2012–2021. The results show that FinTech significantly improves the development of green credit, affecting it through two crucial mechanisms: information asymmetry and green credit allocation efficiency. Additionally, heterogeneity analysis reveals that FinTech has a more significant impact on regions with higher government environmental objectives, small-to-medium enterprises with low carbon emissions, and firms with high external ESG (Environment, Social, and Governance) scores. Overall, our findings indicate that financial institutions should be committed to leveraging FinTech for the pre-loan investigation of green credit, and policymakers should encourage the development of FinTech in order to perfect environmental information disclosure policies to establish environmental information-sharing platforms.

Suggested Citation

  • Qian Liu & Yiheng You, 2023. "FinTech and Green Credit Development—Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-23, March.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:7:p:5903-:d:1110070
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    5. He, Zuojing & Ge, Fangting & Ban, Shengxi & Min Du, Anna & Sheehan, Maura, 2024. "Fintech's influence on green credit provision: Empirical evidence from China’s listed banking sector," Research in International Business and Finance, Elsevier, vol. 70(PB).

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