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Does Digital Financial Inclusion Affect Households’ Indirect Co2 Emissions? Evidence from China
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Preprint
Li, Yao, Tao Zhang, Xinlu Sun, and Kehan He. 2023. “Does Digital Financial Inclusion Affect Households’ Indirect Co2 Emissions? Evidence from China.” SSRN Scholarly Paper. Rochester, NY: Social Science Reseach Network (SSRN). https://doi.org/10.2139/ssrn.4552634
Increasing greenhouse gas emissions, especially CO2, pose a serious challenge worldwide. Digital financial inclusion can help alleviate liquidity constraints and accelerate the green transformation of production, changing how and what households consume. This change can impact households’ indirect CO2 emissions. However, empirical research on the nexus between digital financial inclusion and households’ indirect CO2 emissions, especially from a microscopic perspective, has remained scant. This study investigates the impact of digital financial inclusion on households’ indirect CO2 emissions using a survey panel dataset of 13,624 Chinese households. The results show that digital financial inclusion promotes households’ indirect CO2 emissions.This finding is robust to the alternative model specifications and methods.Further analyses based on the mediation model show that digital financial inclusion increases households’ indirect CO2 emissions by promoting subsistence and development consumption upgrades. In addition, the effects of different services of digital financial inclusion are heterogeneous. Payment, credit, credit investment and investment services are positively and significantly related to households’ indirect CO2 emissions, whereas other services are not. Overall, our findings provide evidence of the social benefits of digital financial inclusion policies and also have several implications for addressing environmental problems.
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