Research on the impact and mechanism of digital finance on carbon emission intensity

Digital finance ( DF ) is an emerging paradigm integrating finance with digital technology and holds significant implications for China’s pursuit of its “dual carbon” goals. Using panel data from 272 prefecture-level cities in China from 2011 to 2021, this paper employs panel fixed-effect models, quantile regression models, mediating effect models, and spatial Durbin models to investigate the impact of DF on carbon emission intensity ( CEI ) and its underlying mechanisms. Overall, DF advancement significantly lowers CEI . Among DF sub-dimensions, depth of use and digitalization degree reduce CEI , but coverage breadth does not. Heterogeneity tests reveal divergent effects of DF on CEI across city categories: the impact varies by region, size, administrative hierarchy, and CEI level, but does not differ significantly between resource-based and non-resource-based cities. Green innovation and industrial structure rationalization serve as effective mediating channels between DF and CEI , while industrial structure advancement does not. DF also generates spatial spillovers, reducing CEI in both geographically proximate and economically similar neighboring regions. Heterogeneity analysis further shows that this spillover effect is more pronounced in resource-based cities, while it is not significant in non-resource-based cities. Accordingly, differentiated strategies should be adopted to strengthen DF development for green transformation.