Inclusive Financial Development, Energy Poverty, and Technological Innovation in China : What Causes What and How?

Although numerous policies and measures in China are aimed at accelerating energy poverty alleviation, few scholars have investigated the nexus between China’s inclusive financial development (IFD) and energy poverty. Accordingly, we first evaluate the composite index of IFD in China, and then empirically examine the energy poverty alleviation effect of IFD by checking the impacts of IFD on energy poverty and its four sub-indexes. We also conduct an asymmetric analysis and detect the moderating and mediating roles of technological innovation in the IFD-energy poverty nexus. The primary findings indicate that: (1) improving the development of China’s inclusive finance can effectively alleviate energy poverty, and the interaction of inclusive finance and technological innovation can strengthen this effect; (2) the energy poverty alleviation effect of IFD depends mainly on strengthening the supply of energy services and gradually improving energy management institutions; (3) IFD and technological innovation show an asymmetric correlation with energy poverty at different quantiles; and (4) China’s IFD not only directly alleviates energy poverty, but also has an indirect promotion effect of energy poverty alleviation by accelerating technological innovation. Following the above empirical conclusions, we successively propose a series of corresponding policy implications