The Impact of Digital Financial Inclusion on Corporate CO2 Emissions: Evidence from China’s A-Share Listed Firms

Abstract

Digital financial inclusion (DFI) serves as a key catalyst for corporate green transition, primarily by easing financing barriers to low-carbon investment and supporting emission abatement efforts. Leveraging a panel dataset of Chinese A-share firms from 2013 to 2023, this paper investigates how DFI influences CO2 emissions and identifies the underlying channels. We find a significant negative correlation between access to DFI and CO2 emissions, with the effect exhibiting pronounced regional heterogeneity, being significant primarily among firms located in eastern China, as well as large-scale enterprises and those in the public services and manufacturing sectors. Mediation tests indicate that this reduction operates through three interrelated pathways: accelerated green technological upgrading, strengthened environmental responsibility, and relaxed credit constraints for sustainability-oriented projects. Further analysis confirms that DFI fosters green transformation by encouraging cleaner production methods and promoting innovation in eco-friendly technologies. Accordingly, we recommend targeted policy interventions, differentiated by firm size and industry, to scale up DFI for corporate decarbonization, complemented by institutional reforms to ensure effective implementation.