The role of digital finance and financing barriers in green innovation: a Study of India

Nenavath Sreenu ()
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Nenavath Sreenu: Maulana Azad National Institute of Technology Bhopal

Economic Change and Restructuring, 2025, vol. 58, issue 5, No 10, 26 pages

Abstract: Abstract Green innovation is essential for India's sustainable growth, yet small and medium firms generally struggle to finance it. Digital finance could help India overcome these limits and advance green technology in a rapidly digitalizing economy. This study uses panel data from 78 Indian cities from 2010 to 2023 to examine how digital financing affects green innovation quantity and quality. We found that digital finance improves green innovation by making financial resources accessible and lowering funding barriers. Southern cities benefit most, followed by northern and western regions, due to internet infrastructure and economic development differences. The study also tests endogeneity to ensure reliability. This research shows how digital financial inclusion may expedite green technical growth, helping policymakers link India's digital transformation with its climate and sustainability goals. Thus, improving digital banking ecosystems could help India achieve greener growth and a low-carbon future.

Keywords: Digital finance; Green innovation; Financing barriers; India; Green technology; Sustainable development (search for similar items in EconPapers)
JEL-codes: G23 G32 O33 Q55 Q58 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10644-025-09923-x

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