The contribution of fintech to inclusive green growth: Exploring the role of green finance and Co2 emissions

Abstract

FinTech, while revolutionizing the financial sector and promoting financial inclusion, is increasingly recognized for its potential to intersect with green finance and sustainable practices. However, there is a need for comprehensive studies to understand its precise mechanisms and global impacts on inclusive green growth. To enhance understanding of this relationship, this study uses panel data from 51 countries within the United Nations from 2008 to 2020. Various econometric techniques are employed, including standard ordinary least squares (OLS) regression, quantile regression, and robustness test models, to explore the intricate relationship between FinTech, Green Finance, and CO2 emissions. Findings indicate that FinTech plays a pivotal role in advancing Inclusive Green Growth through initiatives in Green Finance. Moreover, the study identifies the partial mediation effect of CO2 emissions on the correlation between FinTech and Inclusive Green Growth. Based on these findings, policymakers are urged to promote FinTech for green development, tailor strategies for different levels of Inclusive Green Growth, optimize green finance in intermediate economies, mitigate CO2 emissions from FinTech activities, and adapt FinTech strategies to income heterogeneity for inclusive green growth. These insights contribute to the fields of finance, technology, and sustainable development, offering practical policy implications for fostering a greener and more prosperous future