This paper studies the impact of financial inclusion on energy consumption in China since the new millennium by using provincial data in China from 2000 to 2019. A financial inclusion index is first constructed, and the spatial-temporal evolution of China's financial inclusion and energy consumption are explored. Second, a spatial econometric model is applied to investing their relationship. Third, the mechanism on how financial inclusion may affect energy consumption is investigated through the mediation effect model. Results show that both financial inclusion and energy consumption show signs of polarization in China. Besides, most provinces saw a significant increase in their per capita energy consumption. Further, the relationship between financial inclusion and energy is U-shaped. Lastly, economic growth and technology upgrading mediate the impact of financial inclusion on energy consumption, with the direct effects (II) dominating the mediation effects. Some policy suggestions are also given.
Keywords: Energy economics; Environmental economics; Financial development; Green credit; Mediation effect; Spatial econometric model.
© 2022. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.