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Greening the economy: Green finance and innovation nexus in developing countries

Year: 2025

Type: article

Abstract: The study examines the influence of green finance (GF) on green innovations (GI) and explores how environmental performance (EP) moderates the nexus. For this purpose, advanced panel data techniques were performed on 57 developing countries over the period 2006–2022. Our findings reveal that GF and EP significantly influence GI. Moreover, EP moderates the relationship between GF and GI, showing a substitution effect in the whole sample. However, our results revealed both complementary and substitution effects in different geographic regions. Our study recommends that governments should enhance regulatory support and stability in policies and incentivize renewable energy use to foster GI and improve environmental performance.

Source: Sustainable Futures

DOI: 10.1016/j.sftr.2025.101448

Authors: Mehtab Alam, Sabeeh Ullah

Institution: The University of Agriculture, Peshawar

Language: English

Topic: Sustainable Finance and Green Bonds

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Climate action, Partnerships for the goals, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $2,340