Does the Digital Finance Promote Technological Innovation? Evidence From Chinese Cities

Innovation in green technologies is a useful strategy for achieving sustainable economic growth. This study used a two-way fixed effects model and a threshold regression model, drawing on data from 282 Chinese prefecture-level cities, to examine the influence and workings of digital financial inclusion on regional green technology innovation between 2011 and 2020. The empirical findings demonstrate that digital financial inclusion significantly boosts regional green technology innovation. In particular, the degree to which digital financial inclusion is used and geographic location-related factors that influence this impact may differ. This study also discovered that regional green technology innovation is mediated by the amount of R&D expenditure made by social and economic actors and moderated by environmental regulations. Furthermore, the threshold regression model's empirical results point to a single threshold value in the connection between green technology innovation and digital financial inclusion. It is projected that digital financial development greatly encourages green technology innovation below a certain threshold of digital financial inclusion, set at 2.662. In conclusion, this study emphasizes that, particularly in central and western areas, efforts should be made to supplement the deficiencies of the inadequate development of digital services by strengthening the construction of information infrastructure.