DTCB Impact Mechanism and Air Pollution
Through digital transformation, commercial banks can improve their ability to screen information and increase lending. Information asymmetry between banks and enterprises leads to credit rationing. Credit rationing refers to the insufficient supply of credit by commercial banks. The implementation of credit rationing is beneficial for commercial banks in managing credit risk under the condition of information asymmetry [
18]. DTCB improves the ability to detect information in two ways. Firstly, DTCB can enhance commercial banks’ ability to collect data. Traditional commercial banks mainly collect enterprise data through manual investigation. As a result, the collected information can be subjective and can lag to a certain extent. Hence, it is difficult for commercial banks to gain a complete, accurate, and timely knowledge of enterprises. In the context of the digitalization of the economy, e-Commerce platforms, social network platforms, and credit investigation platforms have accumulated a large amount of corporate data, which can reflect company’s basic information in a more detailed way. The application of cloud computing by commercial banks can connect these data platforms and broaden information channels [
19]. Commercial banks can continuously monitor enterprises using cloud computing and other network technologies, thus improving the timeliness of information acquisition. Commercial banks can also use Internet of Things (IoT) technology to track enterprise operations and output in real time. Second, the use of digital technology can boost commercial banks’ data processing capability. Traditional banks mainly conduct risk assessments on enterprises through manual analysis and a simple scoring model. Through the application of big data, cloud computing, and mathematical statistics models, commercial banks have a stronger data processing capacity [
17]. By improving the ability of information screening, commercial banks can find and loan to more high-profitable enterprises, which increases lending [
20].
- 2.
The impact of increasing lending on air pollution
Lending expansion has both beneficial and bad effects on air pollution. First, increasing lending is conducive to promoting economic growth, which increases air pollution. On the supply side, increasing lending to enterprises alleviates their credit constraints and helps them expand production [
21]. On the demand side, rising consumer loans enables individuals to purchase more durable consumer products (such as air conditioners and washing machines), motivating firms to boost output [
22]. Expanding production certainly increases energy consumption [
23,
24]. In 2020, more than half of the total energy consumption came from coal. Coal is still dominating China’s energy mix. Therefore, expanding energy consumption means increasing air pollution. However, increasing lending is conducive to technological innovation, which may reduce air pollution. Increased lending to enterprises allows them to increase research and development spending, promoting technological progress. Both advanced and cleaner manufacturing methods increase output efficiency and reduce energy consumption per unit of output, reducing air pollution.
- 3.
The impact of DTCB on air pollution
In conclusion, by increasing credit supply, DTCB has both positive and negative impacts on air pollution. On the one hand, DTCB helps enterprises expand their production scale, increasing air pollution. This is called the ‘scale effect’ of DTCB [
9]. On the other hand, DTCB encourages enterprise technical innovation, which reduces air pollution. This is called the ‘technology effect’ of DTCB [
9]. The ‘scale effect’ of DTCB is positively correlated with air pollution, but its ‘technology effect’ is negatively correlated with air pollution. Therefore, the impact of DTCB on air pollution is uncertain. In general, the mechanism by which DTCB affects air pollution is shown in
Figure 1. Therefore, the following hypotheses are proposed.
Hypothesis 1a. The ‘scale effect’ of DTCB is more significant than its ‘technology effect’, so DTCB increases air pollution.
Hypothesis 1b. The ‘technology effect’ of DTCB is more significant than its ‘scale effect’, so DTCB reduces air pollution.
- 4.
Heterogeneity of innovation ability
The impact of DTCB on air pollution varies among cities with different innovation abilities. In academia, there is currently no single definition of innovation ability. Referring to the definition of innovation ability in existing studies, the innovation ability in this article refers to the ability of various subjects of innovation to organically integrate innovation factors to generate new technologies, processes, and services [
25,
26]. In this paper, cities are classified into innovative cities (with strong innovation capabilities) and non-innovative cities (with weak innovation capabilities). Theoretical analysis shows that DTCB decreases air pollution by driving technological innovation. However, the ‘technology effect’ of DTCB does not occur in non-innovative cities. This is because, in non-innovative cities, there is often a shortage of innovation resources, such as innovative talents. When it is difficult to find the talent they need, companies do not innovate their technology, even if they receive loans. Therefore, although DTCB can increase credit supply, it cannot promote technological innovation and thus cannot play its role in reducing air pollution. In innovative cities, there are abundant innovation resources. Companies can easily find the innovative talent they need, so they are likely to use the loans for technological innovation. In this case, DTCB can promote technological innovation by increasing loans, thus reducing PM2.5.
In conclusion, the ‘technology impact’ of DTCB is stronger than the ‘scale effect’ in creative cities, lowering air pollution. In contrast, in non-innovative cities, the ‘technology effect’ of DTCB is smaller than the ‘scale effect’, thus increasing air pollution. Therefore, the following hypothesis is proposed.
Hypothesis 2. In innovative cities, DTCB reduces air pollution. In non-innovative cities, DTCB increases air pollution.
- 5.
Heterogeneity of the degree of digital economy development
The impact of DTCB on air pollution varies among cities with different degrees of digital economy development. The relationship between DTCB and air pollution depends on whether its ‘technology effect’ is greater than its ‘scale effect’. In cities with high digital economy development, the ‘technology impact’ of DTCB is stronger than the ‘scale effect’. The reason for this is that, in cities with high digital economy development, DTCB can better address the financing difficulties of innovation, thereby fully enabling the ‘technology effect’ of DTCB. Innovation usually faces serious financing difficulties due to high-risk and high-level capital investment. Furthermore, to avoid revealing trade secrets, enterprises are usually reluctant to release detailed information related to their innovation projects. This exacerbates the information asymmetry in innovation financing and further undermines the willingness of commercial banks to lend for the innovation of companies [
27]. In cities with high digital economy development, many enterprises within the city have completed their digital transformation [
28]. If a company completes its digital transformation, its technological innovation, production and operation, internal control, and product sales will all be captured in the form of data. These data are open, transparent, shared, and verifiable, and can truly reflect the company’s innovation, production, and sales [
29,
30]. Commercial banks can access the above data in the credit tracking system through digital technology, effectively reducing the information asymmetry and solving the innovation financing difficulties. Therefore, in cities with high digital economy development, the ‘technology effect’ is fully enabled, and the ‘technology impact’ of DTCB may be stronger than the ‘scale effect’, thus reducing air pollution. On the contrary, in cities with low digital economy development, the ‘technology impact’ of DTCB is smaller than the ‘scale effect’. The reason for this is that, in cities with low digital economy development, DTCB can not address the financing difficulties of innovation, which makes it difficult to enable its ‘technical effect’. In cities with low digital economy development, although commercial banks can broaden the information sources through digital transformation, it is difficult to reflect the company’s innovation, production, and sales in the information in real time. Commercial banks have a limited effect on reducing information asymmetry through digital transformation, and they may still be reluctant to lend for the innovation of companies. Therefore, in cities with low digital economy development, the ‘technology effect’ is difficult to enable, and the ‘technology impact’ of DTCB is smaller than the ‘scale effect’, thus increasing air pollution.
In conclusion, the ‘technology impact’ of DTCB is stronger than the ‘scale effect’ in cities with high digital economy development, reducing air pollution. In contrast, in cities with low digital economy development, the ‘technology effect’ of DTCB is smaller than the ‘scale effect’, thus increasing air pollution. Therefore, the following hypothesis is proposed.
Hypothesis 3. In cities with high digital economy development, DTCB reduces air pollution. In cities with low digital economy development, DTCB increases air pollution.