Green Finance, Innovation, and Technological Import: A Resilience-Based Analysis of Sustainable Industrial Transitions

Xi Chen (), Adnan Khurshid (), Naif Alsagr () and Edi-Cristian Dumitra
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Xi Chen: School of Mathematical Sciences, Xingzhi College, Zhejiang Normal University, Jinhua.
Adnan Khurshid: School of Economics and Management, Zhejiang Normal University, Jinhua, Zhejiang, China.
Naif Alsagr: Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh, Saudi Arabia
Edi-Cristian Dumitra: Faculty of Theoretical and Applied Economics, Bucharest University of Economic Studies, Bucharest, Romania

Journal for Economic Forecasting, 2025, issue 2, 147-165

Abstract: This study examines the relationship between green finance (GFN), financial development (FD), and technological import (IOT) in driving sustainable industrial transitions in European countries from 2003 to 2022. This study constructed a composite Industrial Resilience Index (IRI) and estimated four interrelated econometric models. Specifically, it examines how various factors influence IRI, industrial innovation (INV), renewable energy adoption (RE), and green finance (GFN) mobilization. This study employed the Dynamic Common Correlated Effects (DCCE) estimator to account for cross-sectional dependence and heterogeneous dynamics and validated the results using ARDL approach. Findings indicate that GFN and FD significantly enhance IR and INV, particularly when supported by digital infrastructure and favorable environmental policies. Additionally, IoT and mitigation technologies play a pivotal role in the RE transition. At the same time, macroeconomic stability and public expenditure catalyse GFN flows. The results confirm the relevance of Schumpeterian and endogenous growth theories, highlighting the co-evolution of institutions, innovation, and policy. The study concludes with tailored policy recommendations and provides a new empirical foundation for designing integrated financial-technical frameworks to achieve industrial sustainability in Europe.

Keywords: Green Finance; Industrial Resilience; Technological Import; Innovation; Financial Development; Dynamic Common Correlated Effects; ARDL; Europe (search for similar items in EconPapers)
JEL-codes: G28 L52 O33 Q58 (search for similar items in EconPapers)
Date: 2025
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