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How does digital finance drive energy transition? A green investment-based perspective

Author

Listed:
  • Boqiang Lin

    (Xiamen University)

  • Yongjing Xie

    (Xiamen University)

Abstract

Green investments (GIs) in the energy industry are crucial for driving a clean energy transition and fostering environmental sustainability. In the digital economy era, insufficient attention has been paid to digital finance’s (DF’s) influence on GIs in energy enterprises, potentially underestimating its impact. Our study utilized a two-way fixed-effects model, analyzing data from 108 listed energy firms from 2011 to 2020, to empirically investigate the influence of DF on GIs in China’s energy industry. The research findings are as follows: (1) An increase of one unit in DF can improve the intensity of GIs in the energy industry by 0.03% by alleviating financing constraints, increasing cash flow, and correcting financial mismatches. (2) DF has a significant threshold effect on GIs, with market incentive- and command-and-control-based environmental regulations having thresholds of 16.98 and 0.98, respectively. (3) The GI performance of large state-owned energy enterprises in regions with a higher marketization benefits more from DF. We suggested tailored policy suggestions according to these findings.

Suggested Citation

  • Boqiang Lin & Yongjing Xie, 2025. "How does digital finance drive energy transition? A green investment-based perspective," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-23, December.
    • Handle: RePEc:spr:fininn:v:11:y:2025:i:1:d:10.1186_s40854-025-00772-1
    DOI: 10.1186/s40854-025-00772-1
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    More about this item

    Keywords

    Digital finance; Energy transition; Green investments; Environmental regulations; Threshold effect;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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