Impact of Digital Finance on Industrial Green Transformation: Evidence from the Yangtze River Economic Belt

Abstract

Profound changes in information technology have resulted in the rapid development of the digital economy, digitalizing the financial sector and deepening green reforms. Consequently, digital finance has become an important driving force of green development. Using the entropy value method and the global super-efficiency slacks-based measure model, this paper measures the extent of digital finance and industrial green transformation in 108 prefecture-and-higher-level cities in the Yangtze River Economic Belt from 2011 to 2020. It empirically examines the effects and impact mechanisms of digital finance development on industrial green transformation based on the two-way fixed effects, mediated effects, and spatial econometric models. Digital finance can significantly drive industrial green transformation, and this finding remains robust to the exclusion of macro-systematic effects and robustness tests like the introduction of instrumental variables. Digital finance has a positive spatial spillover effect on industrial green transformation. Industrial structure upgrading and green technology innovation are the key ways in which digital finance impacts industrial green transformation; their respective mediating effect contribution rates are 18.70% and 20.93%. In the context of the impact of digital finance on industrial green transformation, significant heterogeneity was observed across regions, the administrative rank of cities, and the degree of developed traditional finance. Based on these conclusions, this paper presents policy recommendations like giving full play to digital finance’s green driving effect, optimizing digital finance’s green empowerment mechanism, implementing regional industrial green differentiated development based on local policies, and encouraging support for green innovation pilots.