Green finance and management efficiency as determinants of firm performance in an emerging economy

This paper examines how green finance, environmental and innovation risks, and managerial and operational efficiencies influence firm performance within Bangladesh’s banking sector. Drawing on the Resource-Based View (RVB) and Contingency Theory, the research integrates internal capabilities and external contingencies into a unified analytical framework. Using panel data from 21 scheduled commercial banks from 2014 to 2023, the study employs the Feasible Generalized Least Squares (FGLS) technique to ensure robust estimation under heteroskedasticity and cross-sectional dependence. The results reveal that environmental risk significantly reduces firm performance, while management and operational efficiencies strongly enhance it. Green finance exerts a positive but modest effect, suggesting that its benefits materialize over time and require supportive policy intervention. In contrast, innovation risk shows an insignificant relationship with firm performance. Overall, the findings highlight the strategic importance of integrating efficiency and sustainability to achieve long-term competitiveness. The study contributes to theory and practice by providing a comprehensive model linking efficiency, risk, and green finance within an emerging economy context.