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Green Financing of Power Sector Transformation and Moderating Effect of Digital Economy

Author

Listed:
  • Nepal, Rabindra

    (School of Business, Faculty of Business and Law, University of Wollongong, Australia)

  • Liu, Yang

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China)

  • Dong, Kangyin

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China)

  • Jamasb, Tooraj

    (Department of Economics, Copenhagen Business School)

Abstract

The electricity sector in many developing nations faces the difficulty of insufficient financing throughout the low-carbon transition, highlighting the importance of green financing in alleviating financial constraints. The advancement of digital technology can provide green finance in the power industry inside the digital economy, but this statement lacks empirical evidence. The primary objective of this research is to investigate the impact of green financing on low-carbon power transformation in developing nations. Additionally, we investigate the moderating role of digital economy between the two. Our findings validate the favorable impact of green financing on low-carbon electricity transformation, and this impact is particularly evident for wind and solar power. We show that this beneficial effect is greater for low-income countries or regions with low levels of electricity transition. We also provide evidence of the positive moderation effect of digital economy and find that this effect has three dimensions: digital infrastructure, digital social impact, and digital social support. This research helps to broaden green financing channels for the power sector in developing countries, especially from the perspective of digital economy.

Suggested Citation

  • Nepal, Rabindra & Liu, Yang & Dong, Kangyin & Jamasb, Tooraj, 2024. "Green Financing of Power Sector Transformation and Moderating Effect of Digital Economy," Working Papers 6-2024, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2024_006
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    References listed on IDEAS

    as
    1. Dev Millstein & Ryan Wiser & Mark Bolinger & Galen Barbose, 2017. "The climate and air-quality benefits of wind and solar power in the United States," Nature Energy, Nature, vol. 2(9), pages 1-10, September.
    2. Paramati, Sudharshan Reddy & Apergis, Nicholas & Ummalla, Mallesh, 2017. "Financing clean energy projects through domestic and foreign capital: The role of political cooperation among the EU, the G20 and OECD countries," Energy Economics, Elsevier, vol. 61(C), pages 62-71.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Green financing; Low-carbon transformation of electricity; Digital economy; Moderation effect; Global case;
    All these keywords.

    JEL classification:

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

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