HAS DIGITAL TRANSFORMATION DRIVEN THE DEVELOPMENT OF GREEN FINANCE? EVIDENCE FROM CHINA

Digital transformation has become one of the key driving forces behind global economic development. Concurrently, there is growing recognition of the importance of green finance as a critical tool for promoting sustainable development and facilitating the transition to a low-carbon economy. While previous studies have acknowledged the contribution of digital technologies to financial innovation, there is a lack of comprehensive examination from the perspective of the intersection between green finance and digital transformation. In this study, the difference-in-difference method is used to systematically evaluate the impact of digital transformation on the development of urban green finance. Our findings demonstrate that digital transformation has consistently stimulated the growth of urban green finance, leading to a significant increase of approximately 1.42% in the Urban Green Finance Development Index. Moreover, the policies exhibit sustained effects and spatial spillover. Additionally, digital transformation significantly influences the development of urban green finance by local fiscal autonomy mechanism, institutional environments and resource inputs. From a spatial distribution perspective, the impact of digital transformation on urban green finance development follows the pattern of the eastern region > central region > western region, with regional synergy effects enhancing the influence of cross-regional digital transformation strategies on urban green finance development. This paper provides a theoretical foundation and practical guidance for the discussion of sustainable financial transformation and policy effects. Additionally, it serves as a practical reference for other developing countries in implementing digital transformation policies, further promoting sustainable development and the realization of a low-carbon economy.