Digital finance and economic green development

We study the impact of digital finance on the green development level of the economy using data from 30 provinces of China from 2011 to 2021. The main findings are as follows: (1) Digital finance significantly enhances the level of regional economic green development, and this conclusion remains valid after a series of robustness tests. (2) The impact of digital finance on economic green development exhibits a threshold effect. Specifically, the green-promoting effect strengthens considerably once the threshold variable surpasses a critical value. (3) Mechanism analysis indicates that digital finance facilitates economic green development through two channels: incentivizing green technology innovation and enhancing the innovation value realization. (4) Heterogeneity analysis reveals that the green-promoting effect is more pronounced in regions with greater usage depth of digital finance, higher levels of digitization, eastern location, and more advanced digital infrastructure. (5) Spatial econometric results confirm spatial dependence in economic green development and a statistically significant direct effect of digital finance on regional green development.