TECHNOLOGICAL INNOVATION AND GREEN FINANCE: CATALYSTS FOR SUSTAINABLE DEVELOPMENT IN DEVELOPING ECONOMIES

Abstract

This research investigates the transformative impact of technological innovation on green finance and its vital contribution to sustainable development in developing economies, covering the period 2008 to 2023. Green finance, enhanced by technologies such as blockchain, artificial intelligence, and big data analytics, influences renewable energy consumption and shapes public attitudes toward sustainability. Two empirical models were employed, and the first assesses the relationship between green finance and renewable energy growth, finding that increased access to green finance significantly accelerates the adoption of renewable energy sources. Notably, this effect is amplified by macroeconomic factors such as GDP growth, trade openness, and urbanization, which create a supportive environment for sustainable investment. The second model explores the determinants of public sentiment regarding green finance, revealing that digital infrastructure (as measured by internet access) and environmental transparency (linked to ESG performance and disclosure) are critical drivers of positive public attitudes. This underscores the importance of digital access and environmental governance in fostering a culture of sustainability. The findings indicate that technological advancements are not only improving the transparency and traceability of green investments, thereby mitigating the risk of greenwashing, but are also facilitating real-time ESG analytics. This technological progress builds investor confidence and accelerates the mainstreaming of sustainable finance. In summary, the research highlights the interconnected roles of technology, green finance, and supportive macroeconomic and digital environments in advancing the transition to sustainability in the developing world.

Keywords: Green Finance, Technological Innovation, Renewable Energy, Sustainable Development