Green innovation strategy, sustainable financial inclusion, and the firms’ green transition

This study explores the interconnections between green innovation strategies, sustainable financial inclusion, and the green transition of publicly listed enterprises. Using a sample of 100 publicly listed firms in China from 2015 to 2022, we employ a panel data regression model to quantify the effects of green innovation on firms' sustainable financial practices and their overall green transition. Our empirical results indicate a significant positive relationship between green innovation and the green transition, with green innovation expenditure explaining approximately 31.2 % of the variation in the green transition score. Additionally, sustainable financial inclusion, measured by access to green financial products, contributes 24.6 % to the green transition process, confirming its pivotal role in enabling firms to adopt greener practices. The interaction effect between green innovation and sustainable financial inclusion is also notable, with a synergistic coefficient of 0.187 (p < 0.05), suggesting that the combination of these two factors accelerates the green transition of firms. These findings underscore the importance of integrating financial inclusion strategies with green innovation to drive sustainability in corporate practices. The paper offers policy recommendations to foster greater access to green finance and promote the adoption of green technologies across industries. Future research could expand on these findings by examining the role of government policies and global environmental standards in shaping corporate green strategies.