Does digital finance enhance industrial green total factor productivity? Theoretical mechanism and empirical test

The development and application of digital finance has brought profound changes to the real economy, and its impact on industrial green total factor productivity is worthy of attention and evaluation. The industrial green total factor productivity of each province in China is measured by using EBM-ML index with the provincial panel data collected from 2011 to 2020. The panel fixed effects model is used to estimate the impact of digital finance on industrial green total factor productivity. The intermediary effect model is constructed to analyze its conduction mechanisms. The heterogeneity of the impact of digital finance on industrial green total factor productivity is further explored. The results indicate that digital finance makes a significant contribution to the promotion of industrial green total factor productivity. Digital finance indirectly promotes the enhancement of industrial green total factor productivity by promoting technological innovation, driving industrial upgrading and stimulating entrepreneurial dynamism. The impact of digital finance on industrial green total factor productivity has obvious sub-dimension heterogeneity and regional heterogeneity. Based on the above conclusions, we also suggest policy recommendations such as unblocking the conduction channels of digital finance and implementing the differentiated digital finance development strategy. The highlight of this paper is that it takes digital finance as the entry point and shifts the research content to the real economy, broadening the research perspective of "digital finance".