The Evolution of Green Finance toward Green Digital Finance in Advancing Sustainable Economic Development
DOI:
https://doi.org/10.59890/ijaer.v4i5.16Keywords:
Digital Financial Inclusion, Emerging Economies, Green Digital Finance, Green Finance, Green Innovation, Sustainable Economic DevelopmentAbstract
Green finance and financial digitalization are increasingly converging, but evidence on their combined contribution to sustainable economic development across emerging economies remains limited. This study examines the relationship between green digital finance (GDF) and sustainable economic development (SED), tests the mediating roles of green innovation and digital financial inclusion, and assesses whether digital infrastructure and regulatory quality condition this relationship. The analysis uses panel data for 20 emerging economies over 2015–2024 and constructs composite GDF and SED indices. Dynamic System-GMM, mediation analysis, and panel-threshold estimation are applied. The reported estimates show a positive association between GDF and SED (β = 0.186, p < 0.01), exceeding the coefficient reported for conventional green finance (β = 0.109, p < 0.05). Green innovation and digital financial inclusion account for 20.1% and 14.6% of the total estimated effect, respectively. Threshold estimates indicate stronger GDF–SED associations above the digital-infrastructure threshold (0.612) and regulatory-quality threshold (0.487). These findings suggest that the contribution of GDF is linked to innovation, financial inclusion, and enabling technological and institutional conditions. The study adds cross-country evidence on the mechanisms and threshold conditions associated with GDF in emerging economies.
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