Digital finance, government intervention, and carbon emission efficiency in China

In accordance with the "dual carbon" objective, China is required to effectively pursue economic expansion and environmental preservation while concurrently enhancing carbon emission efficiency (CEE). This study examines the influence of digital finance on CEE and evaluates the moderating effect of government intervention. The analysis uses panel data collected from 282 cities in China at the prefecture level and above, spanning the period from 2011 to 2021. The findings indicate the following: (1) CEE in China is relatively low, and there are notable regional disparities. Specifically, there is a discernible downward trend in CEE throughout the eastern, central, and western areas. (2) In general, the implementation of digital finance has the potential to enhance the efficiency of carbon emissions. The observed effect is significant in the eastern and central regions but not in the western region. (3) Government subsidies have the potential to amplify digital finance's impact on CEE in the eastern region. Conversely, in the central and western regions, its influence can be increased by environmental regulations. Based on these findings, this study presents recommendations for advancing digital finance, enhancing the targeting and assessment of government subsidies, refining environmental regulations, and encouraging the adoption of green technologies.