Untangling the causal mechanisms and spatial dynamics of digital financial development’s impact on energy intensity: insights from panel data of Chinese provinces

The prime focus of the present investigation delves into the linkage between digital financial services and energy intensity within the geographic confines of China, utilizing provincial-level panel data spanning from 2011 to 2021. Digital finance has rapidly developed due to changes in information technology, and its role in achieving green transformation, reducing energy consumption, and lowering energy intensity in Chinese society is critical. By conducting empirical analysis utilizing diverse models, we have tested our hypotheses and found that digital finance’s improvement can contribute to the reduction in energy intensity at the regional level while still considering endogeneity concerns. This effect is mediated by the promotion of technological innovation and the facilitation of green development in industries. Digital finance’s impact on energy intensity is contingent upon resource endowments, such as the level of traditional financial development and the degree of information. Moreover, digital finance’s adverse impact on energy intensity becomes more pronounced beyond certain threshold values. However, digital finance can increase energy intensity in neighboring regions through spatial spillover effects. Drawing upon our findings, we recommend bolstering the development of digital finance, augmenting the capability for autonomous innovation, and devising specialized strategies for digital finance advancement to fully harness the potential of digital finance in curbing energy intensity. This study interprets the value of digital finance from the new perspective of energy intensity. By exploring the internal links between digital finance and energy intensity, the study enriches the research results on the impact of digital finance on energy intensity.