How does green digital finance drive the low-carbon energy transition in China?

In the modern world, green digital financing is believed to be an efficient, resilient, and viable source of funding for crisis conditions and to solve the preceding issues in a timely manner. It is a modern tool of financing mainly introduced by the World Bank and the International Monetary Fund. Following the paths, most economies started considering it to solve their national economic issues. Thus, to fulfill the requirements of the modern world, current research aims to study the driving role of green digital financing on low-carbon energy transition in China. Using the generalized method of moments (GMM) model based on data collected from 2015 to 2020, this research made an effort to determine the empirical nexus between the green digital financing index and the low-carbon energy transition index and to recommend the possible policy implications to the policymakers and other practitioners. Results have shown that a 0.27% rise in green digital financing is observed in the Chinese economy from scratch, and it resulted from a 0.365% efficiency in the low-carbon energy transition in China. Accordingly, the study resulted that the role of green digital finance is clustering in the Chinese renewable energy industry, which impacts both the performance of the Chinese renewable energy industry and the economy. For more resilience, extended efficiency and viable energy transition study suggested the practical implications for the stakeholders to consider for practice. The novelty of the study is its motivation, findings, and solutions.