Can Digital Finance Promote Comprehensive Carbon Emission Performance? Evidence from Chinese Cities

Improving urban comprehensive carbon emission performance (CCEP) is the inevitable choice for China's low-carbon development. With the continuous integration of digital technology and financial elements, the development of urban digital finance has also been significantly improved. To further explore the impact of urban digital finance on urban low-carbon development, using the data of 281 cities in China from 2011 to 2019, this paper firstly evaluates the urban CCEP, and further empirically investigates how digital finance influences CCEP. The empirical results show that: (1) Digital finance significantly improves the urban CCEP, and after conducting robustness tests and addressing the endogeneity issue, the above conclusion is robust. (2) For the sub-indicators, there is a U-shaped relationship between the coverage breadth of digital finance and CCEP. Moreover, the improvement of usage depth and digital support services could promote CCEP. (3) The channel tests indicate that digital finance improves the CCEP mainly by promoting green technology innovation and the development of urban tertiary industry. Meantime, digital finance has a stronger impact on improving CCEP in cities with more developed traditional finance, and the positive effect is significant in non-old industrial base cities and a two-control zone. Finally, this paper puts forward relevant policy suggestions.