Green Finance and Corporate Environmental Performance: Based on the Mediating Role of Green Technology Investment and the Moderating Role of Government Environmental Policies

ABSTRACT Growing environmental degradation and climate change have intensified the global demand for firms to boost their ecological performance to minimize negative environmental consequences that reduce the quality of the environment. Green finance, which provides firms with the necessary financial capital to undertake environmental initiatives, becomes relevant in both developed and developing countries. Hence, this study investigates the impact of firms' access to green finance instruments on their environmental performance, considering the mediating role of green innovation technologies and the moderating role of government environmental policies in Ghana. Drawing on stakeholder theory and resource‐based view theories, primary data were collected from 589 respondents from various high environmental impact firms in Ghana. SmartPLS 4.0 software was used to analyze the data by employing the Partial Least Squares Structural Equation Modeling (PLS‐SEM) approach. The results revealed that firms' access to green finance instruments significantly influences green technology investment and environmental performance. Additionally, green technology investment significantly mediates the positive relationship between access to green finance and firms' environmental performance. Lastly, government environmental policy strengthens the positive relationship between access to green finance and its environmental performance. This study provides firm‐level orientation and practical insights for managers, policymakers, and investors seeking to improve environmental performance via the use of green financing.