FINTECH INNOVATION AND GREEN INVESTMENT EFFICIENCY: THE MEDIATING ROLES OF FINANCIAL INCLUSION AND SUSTAINABLE GOVERNANCE
Abstract
The accelerating climate crisis has emphasized the importance of channeling capital into sustainable and environmentally responsible projects. Financial technology (FinTech) has come about to enhance the effectiveness of green investments through the provision of accessibility, transparency, and innovation in the financial systems. The efficiency of green investment powered by FinTech innovation has not been well-explored, especially in the areas where sustainable finance and digital transformation are still developing. This paper examines the impact of FinTech innovation on the efficiency of green investments using financial inclusion and sustainable governance as mediating variables. It used a quantitative cross-sectional design where primary data were gathered with chief executive officers, finance directors, and sustainability managers of manufacturing and financial companies that have been involved in green-oriented initiatives in the major industrial centers in Pakistan, such as Lahore, Karachi, Faisalabad, and Islamabad. Out of 410 distributed questionnaire, 303 valid responses were used by using Partial Least Squares Structural Equation Modeling (PLS-SEM). The model evaluated the direct effects of FinTech innovation on green investment efficiency and the indirect effects through the financial inclusion and sustainable governance. Findings indicate that FinTech innovation has a great impact on improving the efficiency of green investment both directly and indirectly. Financial inclusion is a mediating variable because it extends access to digital financial tools and resources are mobilized towards sustainable projects. Sustainable governance enhances institutional responsibility, regulatory adherence, and strategic inclusion of green goals, augment the effectiveness of green investments.
Keywords: FinTech innovation, green investment efficiency, financial inclusion, sustainable governance, sustainable finance.
