Transformations  in
Business & Economics

INFLUENCING PATHS OF CHINAS FINANCIAL INVESTMENT IN SCIENCE AND TECHNOLOGY ON LOW-CARBON ECONOMIC TRANSFORMATION⁷
Ni Zhang, Weina Ding

ABSTRACT: Facing global problems such as energy shortages and intensifying environmental pollution, economic development urgently needs for low-carbon transformation to improve limited resources and vulnerable environmental conditions. Financial investment in science and technology is a capital input closely related with low-carbon economic transformation. To explore the relationship between fintech investment and low-carbon economic transformation and realize high-quality green economic development, the low-carbon economic transformation indexes were built in this study. The Slacks-based Model-Global Malmquist-Luenberger (SBM-GML) method was innovatively used based on data from China City Statistical Yearbooks and China Statistical Yearbooks on Science and Technology from 20102019. The low-carbon economic transformation equilibrium model with considerations to financial investment in science and technology and the panel regression model of influences of financial investment in science and technology on low-carbon economic transformation were established by the vendor production function model and econometrics, respectively. The effect and mechanism of China's financial investment in science and technology on low-carbon economic transformation were analyzed empirically. Results demonstrate that financial investment in science and technology can significantly facilitate low-carbon economic transformation. After endogenous problems are relieved by replacing core variables and dynamic panel model estimation, the results remain robust. Financial investment in science and technology can facilitate low-carbon economic transformation significantly by improving the low-carbon technological innovation level. Fiscal decentralization also has a positive regulation effect in the proportion of financial investment in science and technology to low-carbon economic transformation. Given the higher degree of fiscal decentralization, the promotion of financial investment in science and technology to low-carbon economic transformation is stronger. The promotion of financial investment in science and technology to low-carbon innovation transformation is more obvious in cities in East China, small-scaled cities, non-resource cities, and high-nationalization cities. This study provides a reference for understanding the economic effect of financial investment in science and technology and policy practices of low-carbon economic transformation.

KEYWORDS:  financial investment in science and technology, technological innovation, low-carbon economic transformation, fiscal decentralization.

JEL classification:  Q28, Q51, R15, O13, O32.

⁷Acknowledgments:  This study was supported by the Ministry of Education in China Project of Humanities and Social Sciences for Young Scholars (No. 20B326), and the Beijing Social Science Foundation for Young Scholars (No. 20JJC023).