Greening the economy: Green finance and innovation nexus in developing countries

The study examines the influence of green finance (GF) on green innovations (GI) and explores how environmental performance (EP) moderates the nexus. For this purpose, advanced panel data techniques were performed on 57 developing countries over the period 2006–2022. Our findings reveal that GF and EP significantly influence GI. Moreover, EP moderates the relationship between GF and GI, showing a substitution effect in the whole sample. However, our results revealed both complementary and substitution effects in different geographic regions. Our study recommends that governments should enhance regulatory support and stability in policies and incentivize renewable energy use to foster GI and improve environmental performance.