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Digital financial inclusion (DFI) has the advantage of promoting information sharing, reducing transaction costs, and providing microloan platforms for small and medium-sized enterprises. It has also made outstanding contributions to decreasing CO2 emissions. However, the volatility correlation between DFI and CO2 emissions is still relatively unexplored. This research uses the spatial autoregressive process with conditional heteroscedastic errors (SARspARCH) model to evaluate the spatial fluctuation spillover impacts of DFI on CO2 emissions in 284 Chinese cities covering the period 2011-2016 following the IPAT model. The results indicate that CO2 emissions have significant spatial spillover and volatility effects. The fitted value of SARspARCH estimation results is more realistic than the SAR and spARCH model. DFI alleviates average CO2 emissions in Chinese cities. Moreover, spatial volatility weakens the negative influence of DFI on average carbon emissions. This study provides insights from which governments can strengthen inter-regional communication and synergistic emission-reduction capabilities, and promote the digitization of the financial sector to achieve carbon neutrality goals.
Wang et al. (Sun,) studied this question.