Mediating roles of industrial structure and green technology in green finance and economic growth in developed nations

Globally, rapid economic growth has significantly improved the quality of life for individuals while also leading to significant environmental issues and a depletion of resources. In response to the escalating challenges, countries worldwide are actively transitioning to a novel paradigm of green economic growth. This approach seeks to foster economic expansion while considering limitations on resources and addressing environmental damage. Green finance, industrial structure upgrading, and green technology are all eco- friendly measures for the shift towards green economic growth. Nevertheless, there are conflicting findings on the impact of green finance on green economic growth, and little is known about the mechanisms underlying this impact. Therefore, this study aims to examine the influence of green finance on green economic growth and determine whether industrial structure upgrading and green technology innovation mediate this relationship. A panel sample of 28 developed countries from 1995 to 2022 is chosen in this research because they have undergone swift economic expansion coupled with substantial pollution, leading to a shift towards green economic growth. Furthermore, this study starts with the measurement of a green economic growth index with a four-dimension and eleven-indicator. Subsequently, this research employs data analysis techniques and various models to examine the impact of green finance on green economic growth and the mediating roles of industrial structure upgrading and green technology innovation. The findings of this study display that green finance has a positive effect on green economic growth in developed nations. It demonstrates that the transformation of green economic growth could be encouraged through green financial funding for green initiatives. The results also indicate that industrial structure upgrading acts as a positive mediator in the relationship between green finance and green economic growth, contributing to 8.94% of the overall impact. In addition, the enhancing effect of green finance on green economic growth is also strengthened by the mediator of green technology innovation, accounting for 43.52% of the total influence. In conclusion, green finance, industrial structure upgrading, and green technology innovation are key elements in achieving the green economic transformation of wealthy nations. The outcomes of this research contribute to the existing body of literature by proposing a novel theoretical framework for the impact of green finance on green economic growth. Moreover, they provide concrete suggestions for policymakers, especially in developing countries, with concrete measures to achieve green economic growth, such as increasing green financial support for green activities and accelerating the application of green technology innovation. Additionally, investors can derive advantage from these insights to shift their attention towards green projects to optimise asset allocation and long-term investment returns.

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