Green Financing, Energy Transformation, and the Moderating Effect of Digital Economy in Developing Countries

Rabindra Nepal, Yang Liu, Kangyin Dong (dongkangyin@uibe.edu.cn) and Tooraj Jamasb
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Yang Liu: University of International Business and Economics

Environmental & Resource Economics, 2024, vol. 87, issue 12, No 10, 3357-3386

Abstract: Abstract The energy sector in many developing nations faces the difficulty of insufficient financing throughout the low-carbon transition, highlighting the importance of international green financing in alleviating financial constraints. The advancement of digital technology could facilitate green financing for energy transition in the digital economy, but this statement lacks empirical evidence. The primary objective of this research is to investigate the impact of international green financing on low-carbon energy transformation in developing nations. Additionally, we investigate the moderating role of digital economy between the two. Our findings validate the favorable impact of international green financing on low-carbon energy transformation, and this impact is particularly evident for hydro and wind energy consumption. We show that this beneficial effect is greater for low-income countries or regions with high levels of energy transition. We also provide evidence of the positive moderation effects of digital economy and find that its effects are still present in the transition to hydro and wind energy. This research helps to broaden green financing channels for the energy sector in developing countries, especially from the perspective of digital economy.

Keywords: Green Financing; Low-carbon Energy Transformation; Digital Economy; Moderation Effect; Global case (search for similar items in EconPapers)
JEL-codes: C23 G23 O33 Q42 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10640-024-00922-6

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