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Digital financial inclusion and corporate green innovation

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  • Guan, Lijie
  • Xue, Ying

Abstract

This study examines the impact of digital financial inclusion (DFI) on corporate green innovation using firm-level panel data from Chinese listed companies spanning 2011–2022. Using rigorous econometric methods to address endogeneity and mediating effects, the findings indicate that enhanced DFI significantly promotes firms’ green innovation through deeper and more intensive use of digital financial services rather than broader coverage alone. Further analysis identifies two key mechanisms, wherein DFI (1) alleviates firms’ financing constraints and (2) improves resource allocation efficiency both of which facilitate investment in environmentally oriented innovation. Robustness tests, including instrumental variable estimation and propensity score matching, validate these results. This study contributes to the literature on financial development, innovation economics, and sustainability by providing firm-level evidence that DFI drives corporate green innovation. Policy implications indicate that promoting deeper integration of digital financial services into firms’ financial practices can effectively support sustainable economic growth.

Suggested Citation

  • Guan, Lijie & Xue, Ying, 2025. "Digital financial inclusion and corporate green innovation," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013674
    DOI: 10.1016/j.frl.2025.108112
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