Research On The Impact Of Digital Finance On Interregional Environmental Inequality

Achieving environmental equity is an important means to ensure the effective use of resources and support the achievement of the carbon peaking and carbon neutrality goals.Since the reform and opening up,China’s economic development has made remarkable achievements,but the extensive way of economic growth relying on resource consumption and environmental damage,and the contradiction between industrial development and environmental protection has become prominent.At the same time,the transfer of industries between different regions has caused a redistribution of pollution;coupled with the "pollution refuge" effect,the disparity in industrial pollution emissions between regions is significant,and the problem of environmental pollution inequality is prominent.As an important tool to regulate macroeconomics and resource allocation,finance can,to a certain extent,guide the green development of the economy,and giving full play to the regulatory role of financial instruments is a vital way to achieve pollution reduction.With the combination of digital technology and financial industry,digital finance development relies on digital technologies such as big data,cloud computing and blockchain to change the traditional risk pricing model and improve the efficiency of capital allocation.In this way,can digital finance effectively stimulate investment activities in environmental management in polluted areas,thus producing stronger pollution reduction effects? In this paper,we explore whether digital finance can alleviate environmental inequality.First,this paper conducts a review of the literature and theories on digital finance and environmental inequality,and analyzes the heterogeneous effects of digital finance in supporting emission reduction in regions with different pollution intensities based on the existing research results like Environmental Kuznets Curve theory,financial development theory,and green finance theory.Second,we explain the intrinsic mechanism of digital finance to alleviate environmental inequality from the perspective of emissions and emission reductions,and explore how digital finance alleviates income inequality and green technology innovation inequality,which in turn affects the convergence of pollution emission intensity.Third,we use the coefficient of variation method based on Analytic Hierarchy Process to construct a digital finance index of the commercial banks,and combine it with the Peking University Digital Financial Inclusion Index to establish a comprehensive index system to analyze the overall digital finance development level of each region and provide an index basis for empirical research.Finally,the impact of digital finance on environmental inequality and its influence mechanism are examined by constructing a two-way fixed-effect model and a mediating-effect model,and we further compares the different effects of digital finance in different local government governance capacity,environmental preferences and industrial transfer areas.Based on prefecture-level panel data in China from 2011 to 2020 this paper analyzes the differences in the impact of digital finance on industrial pollution between regions from the perspective of environmental inequality.The findings show that:(1)digital finance can significantly alleviate environmental inequality and narrow the interregional industrial pollution gap.This finding still holds after the endogeneity treatment.(2)Digital finance can be more effective in mitigating environmental inequality when local governments have a stronger governance capacity and stronger environmental preferences.At the same time,with the support of financial resources,the industry transfer-out areas undergo industry gradient transfer,and the transfer of backward industries has led to a more significant mitigating effect of digital finance on local environmental inequality.(3)Exploring the mechanism through which digital finance influences environmental inequality from the perspective of pollution emissions and emission reductions,the analysis finds that digital finance can narrow the income disparities between regions and promote the convergence of green technological innovation,which in turn alleviates environmental inequality.In the future,while continuing to promote the development of digital finance,it is necessary to improve the governance capacity of local governments and the efficiency of resource utilization in the places where industries are undertaken,and to strengthen the role of financial support for environmental pollution control.