Sustainable Synergy: Exploring the Interplay of Green Finance and Financial Technology in Driving Economic Growth

Abstract

Purpose: This study investigates the interplay between green finance (GF) and financial technology (Fintech) in driving sustainable economic growth in Pakistan.

Approach: Using a regression model, the impact of GF and Fintech on sustainable economic growth indicators, namely Economic System (ES) and Environmental Quality Management (EQM), is analyzed across six time periods.

Findings: The results reveal significant positive relationships between GF and both ES and EQM, with coefficients ranging from 0.007 to 0.016. Similarly, Fintech demonstrates a significant positive association with ES, ranging from 0.004 to 0.007 across different time periods. Moreover, the interaction term (GF*Fintech) exhibits a significant impact on ES in certain periods, emphasizing the synergistic effects of GF and Fintech on economic sustainability. Additionally, variables such as energy consumption, GDP per capita, and fiscal expenditure significantly influence ES and EQM outcomes. Co-integration tests confirm the existence of a long-term equilibrium relationship among the variables, further supporting the regression analysis results.

Originality: The study underscores the importance of integrated policy approaches to promote green finance and financial technology initiatives, highlighting their critical role in achieving sustainable economic growth and environmental quality management in Pakistan.