The Impact of Fintech Development on Air Pollution

Abstract

Over the past 40 years of reform and opening-up, China has achieved rapid economic and technological growth at the cost of severe air pollution. The emerging Fintech, as the result of financial institutions’ adapting to the latest digital technology, might be a solution to reduce air pollution. This paper investigates the impact of Fintech development on air pollution using a two-factor fixed effects model based on data for prefecture-level cities in China from 2011 to 2017. The findings show that Fintech development can effectively reduce air pollution emissions, and this conclusion is proved to be robust throughout a series of tests. The mechanism analysis shows that Fintech reduces air pollution by promoting digital finance and green innovation.