Digital inclusive finance and energy transition towards carbon neutrality: Evidence from Chinese firms

Publication Name

Energy Economics


Given the ongoing digitalization process in financial sector, the interaction between the energy transition and digital inclusive finance (DIF) can potentially affect the decarbonization process towards carbon neutrality. This paper utilizes an unbalanced panel data of Chinese firms spanning from 2011 to 2015 to estimate the impact of DIF on firms' low carbon energy transition with a fixed-effect model. The findings reveal that the development of DIF has a significantly negative effect on firms' consumption of fossil fuels. These findings remain robust even after employing a series of robustness tests and implementing an instrumental variable approach to address potential endogeneity concerns. Investigations of the underlying mechanism reveal that DIF primarily promotes the energy transition by increasing firms' investment in information and communications technology (ICT) and green technologies. Moreover, DIF plays a particularly significant role in promoting the energy transition of non-state-owned firms, small firms, non-energy-intensive firms, and firms in the eastern region. This paper suggests leveraging the positive role of DIF in the energy transition of firms, especially by encouraging firms to invest in sustainable technologies to accelerate their energy transition. Furthermore, it emphasizes the need for coordinated development of DIF in different regions and addresses the imbalance in firms' energy transition across these regions.

Open Access Status

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Funding Number


Funding Sponsor

National Natural Science Foundation of China



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