Digital Finance, Environmental Regulation, and Green Technology Innovation: An Empirical Study of 278 Cities in China

Abstract

Digital finance provides a premises guarantee for green technology innovation, and effective environmental regulation helps to achieve green and sustainable development. This article selects Chinese urban panel data from 2011 to 2019 to explore the impact mechanism of the influence of digital finance and environmental regulation on the innovation capacity of green science and technology. It is found that extensive financing channels and the strong information-matching ability of digital finance have a significant promoting effect on local green science and technology innovation. Moreover, government environmental regulation not only facilitates the development of green technology innovation locally and in nearby regions, but also strengthens the utility of digital finance in driving green science and technology innovation. Further research found that the influence of digital finance and environmental regulation on the ability of green science and technology innovation has regional heterogeneity, and only digital finance in Central China can promote green science and technology innovation in both local and adjacent areas. Therefore, the government should continue to promote the development of digital finance, optimize environmental regulations by increasing environmental protection subsidies and creating a green innovation environment, and further stimulate willingness to innovate green technologies. At the same time, it is also important to note the coordinated development and governance with neighboring regional governments.

The Heterogeneous Effects of Formal and Informal Environmental Regulation on Green Technology Innovation—An Empirical Study of 284 Cities in China

“…This paper also found that the effects of FER and IER showed significant regional differences and that the effects of FER and IER decreased from the eastern region to the central and western regions. Similarly, Zhang et al [ 58 ] and Hu et al [ 59 ] showed that there is regional heterogeneity in the effect of environmental regulation on GTI. Shao et al [ 60 ] showed that environmental regulation has a positive effect on GTI in eastern China but not in the central and western regions.…”

The impact of carbon trading on the “quantity” and “quality” of green technology innovation: A dynamic QCA analysis based on carbon trading pilot areas

“…Secondly, the application of the QCA method is limited to cross-section data, primarily focusing on consistency and neglecting coverage exploration. Although the impact of environmental regulation policies on green technology innovation and green total factor productivity has been extensively studied [ [45] , [46] , [47] ], few scholars have examined the mechanism through which carbon trading policies affect green technology innovation. Furthermore, there is a lack of research exploring the impact of carbon trading policies on the “quantity” and “quality” of green technology innovation from a micro perspective, considering the time and space effects.…”

Digital Finance and Green Development: Characteristics, Mechanisms, and Empirical Evidences

“…At the same time, it effectively curbs pollution investment, which not only helps to accelerate the green transformation of China’s economy, but also helps to promote technological progress in environmental protection, new energy, and energy conservation. In addition, digital finance can play the role of lubricant, accelerate the free circulation and effective allocation of capital, information, digital, technology, and other elements, and correct the market failure and financial fragmentation caused by information asymmetry in traditional finance [ 42 , 43 , 44 ]. It is an important hand to realize green development, transformation, and upgrading, and plays a decisive role in supporting green industry and sustainable economic and social development.…”