Effect of Digital Finance on Environmental Pollution: Evidence from China

Since 1978, China has achieved remarkable economic growth, but the extensive development mode has also brought serious resource and environmental problems. Digital Finance (DF) has the characteristics of inclusiveness and equality, which can break down financial barriers and promote economic growth, technological innovation, industrial upgrading, and sustainable development. Through theoretical analysis of the impact of DF on environmental pollution and different pollutants, this paper proposes research hypotheses and takes the provincial panel data of China from 2012 to 2020 as an example to conduct empirical research. The two main findings are: (1) The impact of DF on environmental pollution is U-shaped, and the current level of DF has crossed the inflection point of the U-shaped curve, and DF increases environmental pollution. (2) Digital finance has different impacts on different pollutants. Finally, according to the conclusions of the study, the paper puts forward some policy suggestions for the green and sustainable development of developing countries.