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Can digital finance reduce industrial pollution? New evidence from 260 cities in China

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  • Hongmei Wen
  • Jingliang Yue
  • Jian Li
  • Xuedan Xiu
  • Shen Zhong

Abstract

Industrial pollution reduction is a crucial issue in the pursuit of sustainable economic and environmental development. As a product of the deep integration of traditional finance and Internet information technology, digital finance has become an effective tool for regulating the use of funds and strengthening the effectiveness of policies in the context of the digital era, which has obvious effects on industrial pollution emissions. Using panel data of 260 prefecture-level cities in China from 2011–2019 and the digital inclusive finance index jointly compiled by Peking University and Ant Financial Services Group, this paper empirically analyzes the impact of digital finance on industrial pollution emissions through fixed effects model, mediating effects model and threshold effects model. The empirical results show that digital finance can effectively reduce industrial pollution and part of the impact is achieved through industrial structure. In the process of reducing industrial pollution by digital finance, there exists double threshold effects. When the development of digital finance breaks the threshold value, the industrial pollution emission reduction effect appears to accelerate. Finally, this paper puts forward targeted suggestions to promote industrial pollution reduction and environmental economic development.

Suggested Citation

  • Hongmei Wen & Jingliang Yue & Jian Li & Xuedan Xiu & Shen Zhong, 2022. "Can digital finance reduce industrial pollution? New evidence from 260 cities in China," PLOS ONE, Public Library of Science, vol. 17(4), pages 1-22, April.
    • Handle: RePEc:plo:pone00:0266564
    DOI: 10.1371/journal.pone.0266564
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    Cited by:

    1. Jin, Laiqun & Dai, Jiaying & Jiang, Weijie & Cao, Kairui, 2023. "Digital finance and misallocation of resources among firms: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).
    2. Guanghao Li & Xiaoliang Zhou & Zhe Bao, 2022. "A Win–Win Opportunity: The Industrial Pollution Reduction Effect of Digital Economy Development—A Quasi-Natural Experiment Based on the “Broadband China” Strategy," Sustainability, MDPI, vol. 14(9), pages 1-21, May.
    3. Sun, Yanan & You, Xiaotong, 2023. "Do digital inclusive finance, innovation, and entrepreneurship activities stimulate vitality of the urban economy? Empirical evidence from the Yangtze River Delta, China," Technology in Society, Elsevier, vol. 72(C).
    4. Yang Linghui & Kelvin Lee Yong Ming & Irfah Najihah Binti Basir Malan & Shen Yi & Ling Pick Soon & Lin Woon Leong, 2024. "Financial Inclusion, Digital Financial Inclusion and Air Quality: Evidence from Asian Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 407-410, May.
    5. Razzaq, Asif & Yang, Xiaodong, 2023. "Digital finance and green growth in China: Appraising inclusive digital finance using web crawler technology and big data," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    6. Li, Zihao & Yuan, Bingbing & Bai, Tingting & Dong, Xu & Wu, Haitao, 2024. "Shooting two hawks with one arrow: The role of digitization on the coordinated development of resources and environment," Resources Policy, Elsevier, vol. 90(C).
    7. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Skare, Marinko, 2023. "Asymmetric influence of digital finance, and renewable energy technology innovation on green growth in China," Renewable Energy, Elsevier, vol. 202(C), pages 310-319.
    8. Guannan Wang & Juan Meng & Bin Mo, 2023. "Dynamic Volatility Spillover Effects and Portfolio Strategies among Crude Oil, Gold, and Chinese Electricity Companies," Mathematics, MDPI, vol. 11(4), pages 1-25, February.

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