The impact of digital finance on green technological innovation: a cross-country analysis

This study examines the impact of digital finance on green technological innovation (GTEC_INV) using panel data from 11 countries spanning 2010–2023, including developed, emerging, developing, transition, and small-island economies. Using unit root and cross-sectional dependence tests together with a system GMM estimator, the study addresses heterogeneity and endogeneity in the digital finance–green innovation relationship. The results show that digital financial services have a positive and statistically significant effect on GTEC_INV with a coefficient of 0.3457 at the 1% significance level. Economic growth and R&D investment also promote green innovation, while industrial dependence shows a negative effect. These findings suggest that digital finance enhances access to funding, supports sustainable technological development, and complements innovation-oriented economic structures. The study contributes to the literature by providing cross-country evidence across diverse economic contexts rather than focusing on a single country or region. The findings also highlight uneven benefits across countries, implying that policy support is needed to strengthen digital infrastructure, financial inclusion, and green innovation capacity in less-developed settings.