Greening the Future: The Nexus of Digital Finance, Innovation and Environmental Sustainability

Abdul Razzaq; Muhammad Bilawal Zaheer; Kiran Afzal; Mavra Shabbir

doi:10.54938/ijemd-ss.2026.05.6.923

Authors

Abdul Razzaq Quaid-i-Azam School of Management Sciences (QASMS), Quaid-i-Azam University, Islamabad, Pakistan
Muhammad Bilawal Zaheer Quaid-i-Azam School of Management Sciences (QASMS), Quaid-i-Azam University, Islamabad, Pakistan
Kiran Afzal PMAD, Ministry of Defence, Pakistan
Mavra Shabbir Iqra University, Islamabad, Pakistan

DOI:

https://doi.org/10.54938/ijemd-ss.2026.05.6.923

Keywords:

financial technology, green energy, institutional quality, green innovation, carbon emissions, panel data, mediation

Abstract

This study investigates the relationships between financial technology development, green energy development, institutional quality and carbon dioxide emissions, with particular attention to the mediating role of green innovation and the moderating role of renewable energy consumption. Using a panel of 150 countries over 2010 to 2022, the analysis applies two way fixed effects, indirect effect estimation, interaction models and dynamic panel sensitivity analysis. Financial technology development and green energy development exhibit negative associations with per capita carbon emissions, whereas the direct association for institutional quality is statistically insignificant. Green innovation transmits a significant negative indirect association between financial technology development and emissions, but the corresponding indirect effects for green energy development and institutional quality are not statistically distinguishable from zero. The interaction between green innovation and renewable energy consumption is also insignificant. The findings distinguish direct environmental associations from innovation pathways and underscore the importance of separating clean-energy development from renewable-energy consumption in empirical measurement.

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References

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