Mapping the nexus of digital finance and energy transition in Chinese prefecture-level cities

Abstract

The growing digitalization of the financial industry, particularly through digital banking, offers significant potential to guide cities toward carbon neutrality. This study aims to explore the nexus between digital finance and energy transition efficiency across Chinese prefecture-level cities over the period 2014–2023, using a spatial econometric model to analyze panel data. We specifically investigate the impact of digital finance on energy transition, the geographical spillover effects, and the moderating mechanisms involved. Our results reveal a robust positive relationship between digital finance and energy transition efficiency. Digital banking not only enhances energy transition within cities but also exerts favorable geographical spillover effects on neighboring cities. Furthermore, our analysis highlights that digital economy-related policies amplify the positive impact of digital finance on energy transition. These findings underscore the crucial role of digital finance in promoting energy transition and suggest that fostering the digital economy can significantly accelerate the journey toward carbon neutrality.

Keywords

• Digital finance
• Energy transition
• Prefecture-level cities
• Spatial spillover effects
• Total factor productivity
• Sustainable development