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Green Financing, Energy Transformation, and the Moderating Effect of Digital Economy in Developing Countries

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  • Rabindra Nepal

    (University of Wollongong)

  • Yang Liu

    (University of International Business and Economics)

  • Kangyin Dong

    (University of International Business and Economics)

  • Tooraj Jamasb

    (Copenhagen Business School)

Abstract

The energy sector in many developing nations faces the difficulty of insufficient financing throughout the low-carbon transition, highlighting the importance of international green financing in alleviating financial constraints. The advancement of digital technology could facilitate green financing for energy transition in the digital economy, but this statement lacks empirical evidence. The primary objective of this research is to investigate the impact of international green financing on low-carbon energy transformation in developing nations. Additionally, we investigate the moderating role of digital economy between the two. Our findings validate the favorable impact of international green financing on low-carbon energy transformation, and this impact is particularly evident for hydro and wind energy consumption. We show that this beneficial effect is greater for low-income countries or regions with high levels of energy transition. We also provide evidence of the positive moderation effects of digital economy and find that its effects are still present in the transition to hydro and wind energy. This research helps to broaden green financing channels for the energy sector in developing countries, especially from the perspective of digital economy.

Suggested Citation

  • Rabindra Nepal & Yang Liu & Kangyin Dong & Tooraj Jamasb, 2024. "Green Financing, Energy Transformation, and the Moderating Effect of Digital Economy in Developing Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(12), pages 3357-3386, December.
    • Handle: RePEc:kap:enreec:v:87:y:2024:i:12:d:10.1007_s10640-024-00922-6
    DOI: 10.1007/s10640-024-00922-6
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    More about this item

    Keywords

    Green Financing; Low-carbon Energy Transformation; Digital Economy; Moderation Effect; Global case;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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