The impact of fintech on carbon efficiency: Evidence from Chinese cities

Increasing carbon efficiency can slow climate warming. The role of financial technology (fintech) in carbon efficiency has become a concern. Based on data from 276 Chinese cities from 2006 to 2019, we discuss fintech's direct impact on carbon efficiency. We also discuss the impact mechanism, the heterogeneous impact, and the spatial spillover effect using panel fixed effects, mediated effects, and spatial regression models. We offer the following findings: (1) Fintech can directly and significantly improve carbon efficiency in Chinese prefecturelevel or above cities. (2) The mechanism analysis indicates that fintech can improve carbon efficiency by increasing financial science expenditure or green innovation. (3) The heterogeneity analysis indicates that fintech significantly impacts carbon efficiency in the eastern regions and cities with higher market potential. (4) Spatial regression models using economic distance or inverse distance matrices reveal that the role of fintech in enhancing carbon efficiency in cities is spatially significant. These findings may have profound implications for Chinese cities' fintech development and carbon-efficiency targets.