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Digital financial development and indirect household carbon emissions: empirical evidence from China

Author

Listed:
  • Suling Feng

    (University of Jinan)

  • Junjie Liu

    (University of Jinan)

  • Dehui Xu

    (University of Jinan)

Abstract

With the worsening of global climate change, balancing economic development with the ecological environment has become an important concern and topic of research across the world. It is worthwhile to study digital finance as a product of the organic combination of finance and digital technology; moreover, the study would include how it affects indirect household carbon emissions while increasing income and promoting consumption. Based on a theoretical analysis, panel data on 30 Chinese provinces from 2014 to 2020 are used to empirically test the impact of digital financial development on indirect household carbon emissions and the underlying mechanism. The impact of digital financial development on the inequality in indirect carbon emissions between urban and rural households is further explored. The research findings show that the development of digital finance increases indirect household carbon emissions. Heterogeneity analysis shows that digital financial development has a greater impact on indirect household carbon emissions in central and western regions and urban areas than in eastern and rural areas. The mechanism analysis shows that the development of digital finance reduces indirect household carbon emissions by promoting green technological innovation; furthermore, it increases indirect household carbon emissions by increasing household income levels. Further analysis shows that the development of digital finance aggravates the inequality in indirect carbon emissions between urban and rural households, and that the urban–rural inequality in household income is an important channel for this effect. The above research conclusions indicate that the development of digital finance results in economic growth at the expense of increasing indirect household carbon emissions and aggravating the urban–rural inequality of such emissions. The above results not only enrich relevant theories of digital finance but also help coordinate the relationship between the development of digital finance and household carbon emissions, which is of great importance for addressing climate change and ensuring sustainable economic development.

Suggested Citation

  • Suling Feng & Junjie Liu & Dehui Xu, 2024. "Digital financial development and indirect household carbon emissions: empirical evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 23401-23435, September.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:9:d:10.1007_s10668-023-03603-4
    DOI: 10.1007/s10668-023-03603-4
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    References listed on IDEAS

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