Digital Finance, Financial Inclusion and Green Economic Efficiency: A New Analysis

This study examines the coupling mechanisms among the development of digital finance, the deepening of financial inclusion, and green economic efficiency in China from 2011 to 2020. Using a balanced panel dataset of 31 provinces, we employ the Slack-Based Measure (SBM) model to measure green economic efficiency, grey correlation analysis to explore the dynamic interactions between digital finance and green economic outcomes, and VAR models to analyze the spatiotemporal coupling mechanism. The findings reveal that digital finance initially suppresses green economic efficiency, but its long-term effects become positive as the coverage and accessibility of inclusive finance expand. We also identify significant regional differences in the impact of digital finance on green economic efficiency, with eastern provinces benefiting more from digital finance than central and western provinces. These results provide important insights for policymakers seeking to promote sustainable economic growth through digital finance and financial inclusion, and highlight the need for region-specific policies to maximize the potential of digital finance in enhancing green economic objectives.