Digital Inclusive Finance Drives Green Innovation: Pathways and Mechanisms for Sustainable Development

Yamin Xie ()
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Yamin Xie: Shanghai University

Journal of the Knowledge Economy, 2025, vol. 16, issue 4, No 37, 14867-14906

Abstract: Abstract This study investigates how digital inclusive finance supports corporate green innovation and expands the theoretical boundaries of integrating the digital and green economies. It offers interdisciplinary knowledge, empirical evidence, and policy recommendations to promote global environmental and economic sustainability goals. The study uses panel data from publicly listed companies in China and employs various econometric methods, including a two-way fixed effects model, ordinary least squares regression model (OLS), two-stage least squares method (2SLS), generalized method of moments dynamic panel model (GMM), mediation effect model, and heterogeneous group regression model. These methods comprehensively analyze the mechanisms and pathways through which digital inclusive finance drives corporate green innovation. The results indicate that the expansion and coverage of digital inclusive finance significantly enhance corporate green innovation capabilities. The robustness of the findings is confirmed through endogeneity tests. Pathway and mechanism analysis reveal that digital inclusive finance indirectly stimulates green innovation capabilities by alleviating financing constraints and optimizing capital structure. Heterogeneity analysis demonstrates that the impact of digital inclusive finance on green innovation is more pronounced in state-owned companies, western regions, non-high-tech firms, and high-pollution industries. The main significance of this study lies in promoting the synergistic development of digital inclusive finance and green innovation. It assists companies in transitioning from environmentally regulated passive green innovation to market-driven proactive green innovation, providing new pathways and mechanisms for achieving sustainable development goals. These findings are valuable for formulating relevant policies and practices, enhancing resource utilization efficiency, reducing environmental burdens, and achieving sustainable economic and ecological development.

Keywords: Digital inclusive finance; Green innovation; Financing constraints; Corporate leverage level; Sustainable development (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-02497-5

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