The impact of digital financial development on the green economy: An analysis based on a volatility perspective

Without a doubt, green development is a consensus reached by most countries globally. However, detailed discussions on the impact of digital finance on green development remain scant among scholars. To address this gap, we first construct a Green Development Index for China. Utilizing provincial panel data from 2011 to 2019, we aim to evaluate the influence of digital finance on green development. Additionally, our research aimed to ascertain the 'rebound' effect of digital finance on green development, especially in terms of volatility. The results show that the development of digital finance has a positive impact on green development, but this impact is asymmetric, mainly exhibiting regional disparities and threshold effects. Moreover, digital finance can effectively suppress consumption volatility and the negative impact of green financial shocks on green devel-opment. Importantly, the smoothing effect of digital finance is particularly pronounced during downturn phases of the financial cycle. Further examination revealed the moderating roles of educational attainment, economic structure, R&D, and governmental intervention. Our findings underscore the pressing need for governmental authorities to prioritize economic transformation and R&D activities to amplify the synergistic benefits between digital finance and green growth. Concurrently, it's essential for governments to carefully evaluate their fiscal policies to ensure they do not inadvertently obstruct the path to sustainable green development.