Renewable Energy 193 (2022) 913e919

Contents lists available at ScienceDirect

Renewable Energy
journal homepage: www.elsevier.com/locate/renene

Impact of fintech and green finance on environmental quality

protection in India: By applying the semi-parametric difference-in-
differences (SDID)
Sreenu Nenavath, PhD Dr
Department of Management Studies, Maulana Azad National Institute of Technology Bhopal, MP, 462003, Madhya Pradesh, India

a r t i c l e i n f o a b s t r a c t

Article history: This research study is one of the significant to offer an inclusive investigation of the impact of green
Received 25 November 2021 finance correlated policies by applying text analysis approach and panel data from 28 states and 8 union
Received in revised form territories between 2010 and 2020. The paper uses the SDID and illustrates that overall, India's green
22 March 2022
finance associated with policies have directed a substantial decrease in industrial CO2 emissions during
Accepted 3 May 2022
the study period. Furthermore, the paper determined that the Fintech growth pays to the reduction of
Available online 10 May 2022
SO2 (sulfur dioxide) emissions and positively influences environmental safety and investment enter-
prises. India is a great competitor worldwide in green finance strategy operation, and controllers need to
Keywords:
Environmental protection
accelerate the design of green finance products and boost the volume of financial institutions to provide
Green finance green credit facilities. Though minimalizing the risk fintech stances, policymakers should inspire fin-
Fintech tech's to take part in environmental quality protection inventiveness that encourages green consumption
And systemic risk actively.
© 2022 Elsevier Ltd. All rights reserved.

1. Background of the study policies that encourage green finance systems, Abbasi, F., Riaz, K.,
[6]. Financial market tools like green bonds for raising funds are
India's green finance business is rising speedily, converting the now being used to guarantee environmental ventures are funded in
nation's economic segment in the process. Even though green a supportable way. The green bonds are fixed-income tools ex-
finance has been a burning theme amongst investigators for the last pected at backup environmental ventures. These green finance
five years, it remains theoretically unclear, Sreenu N [1]; Sreenu N bonds frequently have numerous tax inducements to raise
[2]; Sreenu N [3]. Green finance denotes the financial arrangements commitment and insufficient the green finance gap Danish, Ulucak,
that are explicit to the use for environmentally sustainable projects R., Khan, S.U.D., [7]. Green finance has to turn out to be a significant
or projects that implement the aspects of climate change, Sreenu N policy apprehension for emerging economies. The RBI (reserve
[1]; Sreenu N [2]; Sreenu N [3]. There are three core classes of green bank of India
2019) proposed forming a green financial structure
finance: fixed asset, current assets, credit, and investment, ac- that boosts the private segment to perform a further dynamic role
cording to Volz, U [4]. Green finance tries to find to involve the in sustainable expansion. Green bonds are ideal for shareholders as
private division in capital environmental protection schemes to link they can improve the firm value in the long run period, Nasreen, S.,
the gap left by inadequate public funds. Emerging nations face Anwar, S., Ozturk, I., [8]. Even though green finance is a progres-
sundry credit restrictions that raise the prospect of unfortunate sively significant policy issue in India, quite a lot of fences still occur
climate performance, subsequently the need for dynamic green at the functioning micro-levels.
finance guidelines, Nenavath Sreenu [5]. Governments' entitlement Even though, there is still a prerequisite for better direction
in emerging nations is to advance nations and adopt appropriate between policymakers and investors, green finance in India is
previously resilient positive outcomes. There is an opposite asso-
ciation between the green asset and Carbon dioxide emissions,
Abbreviations: CO2, Carbon dioxide; Fintech, Financial technology; SDID, Semi- Deng, Huang, & Cheng [9]. Green financing without help cannot
Parametric Difference-in-Differences; GDP, Gross domestic product; FEM, fixed guarantee fruitful environmental quality protection inventiveness,
effects model; LPM, Linear Probability Model. and it has to be enlarged in size by noteworthy assets in both social
E-mail address: [email protected].

https://doi.org/10.1016/j.renene.2022.05.020
0960-1481/© 2022 Elsevier Ltd. All rights reserved.
S. Nenavath Renewable Energy 193 (2022) 913e919

capital and industrial innovation, Sreenu N, KS sekhar Rao and irregularity and ethical risks while confirming an optimum equi-
Sonal Trivedi (2021). Green finance is projected to perform a sig- librium between environmental science and finance, Gaddy, B.E.,
nificant role in accomplishing the climate change goal line in the Sivaram, V., Jones, T.B., Wayman, L., [17]. To adjacent the green
Paris Agreement in France under the umbrella of the United Na- finance research gap, there is a requirement to progress investment
tions Framework Convention for Climate Change (UNFCCC) to strategies based on continuing policy perceptions Herremans, I.M.,
reduce greenhouse gases (UNFCCC, 2016). India is at the lead of Nazari, J.A., [18]. India's green evolution financial management
green finance creativities, with the most likely recipients being model is one of the utmost inclusive in the globe, and it is on the
emerging countries with a steady political climate and significant pathway to be the other nations' top leader in green finance,
credit risk. Green finance inventiveness faces composite risk pro- Geddes A., Schmidt T. S. and Steffen, B [19]. Based on the theoretical
portions that disturb their inclusive performance. For illustration, examination presented in the above research gap, the paper design.
carbon funding comprises substantial risks for financial organiza-
Hypothesis - 1. is there any significant relationship between
tions. To certify the continuing resilience of green finance ventures,
green finance policies and positive environmental results.
financial organizations necessary to hedge in contradiction of
related risks, Khan, M.T.I., Yaseen, M.R., Ali, Q., [10]. Although green
finance significantly decreases emissions, it has an undesirable 3. Fintech vs green finance
outcome on exceedingly polluting firm performance over a short
duration. Fintech is self-assured to play a significant foremost role in the
Indian states of green finance over leveraging big data analytics
2. Research gap - Indian Green finance (BDA) and artificial intelligence (AI) to adopt a green finance
changeover between customers and SMEs, Macchiavello, E.; Siri, M
Indian Green finance strategies play a controlling part in credit [20]. The paper identified a research gap concerning the partici-
source to new innovativeness in regions with undeveloped finan- pation of fintech in the safety of environmental quality efforts in
cial environments along with state-maintained enterprises, Pata India. This research gap is accredited to various fintech firms not
U.K., [11]. India is playing a very significant role in green credit plan being dynamically participating in these efforts. Forest business
operation. It is significant for green finance strategy to influence the approach example of how financial technology (fintech) stages can
expertise and establish associations between banks and new en- boost customers to contribute to green finance developments
terprises, Stoian, A., Iorgulescu, F., [12]. Green financing rules based dynamically. Customers and small and medium businesses benefit
on strict CO2 emission requirements have frequently resulted in a from the reward-winning company's sustainable green finance
win-win situation for the creators and suppliers. T. Muganyi, Y. evolution, X. Deng, Z. Huang, and X. Cheng [21]. The forest business
Linnan, H.-p. Sun [13]. Green finance procedures also have a better model inspires the customers to decrease the CO2 footmark by
impact on the engineering industry, disclosed a positive relation- satisfying green finance behavioural approach such as preferring to
ship between green finance tools and firm novelty, final that green travel by public transportation, go by walking, cycling, and paying
finance can play an imperious role in India's intellectual and services use online. Operators can collect these CO2 investments
maintainable manufacturing evolution. Increased examination on and make green energy which they can practice to produce a virtual
green bonds in markets is helping the expansion of a further green tree. In the same order, internet finance has become a tendency in
finance environment, Gallagher. In utmost developing market- the future growth of the green finance industry due to its high
places, together with India, the efficiency of green finance enter- efficiency and high coverage. The integration of green finance and
prises depends on economic growth. Developed states are more fintech makes resource apportionment more rational and resolves
suggestively stuck by bank green finance actions, Wang, Y., Li, J., some problems in the expansion of green finance. As one of the
[14]. Green finance is indispensable for maintainability and significant products of the “fintech þ Green Finance” exercise, the
manufacture within the low-cost component. By consolidating the Forest business model completely validates the innovation of the
veracity of green finance systems, managements can accomplish business model derived from “fintech þ Green Finance”. This paper
their supportable development goal line, Nenavath Sreenu, K.S. S. discovers the business model's viability by examining the business
Rao & Kishan D [15]. Green finance procedures need harmonization model of forest from three aspects: customer value intention, profit
amongst all investors to progress efficiency and assurance steadi- model, and key processes.
ness which is not constantly the case, T. Muganyi, Y. Linnan, H.-p. The fintech firms dynamically integrate “green finance” actions
Sun [13]. intended to apply science and technology to decrease CO2 emis-
Commercial banks in India significantly value green organiza- sions and simplify competent resource operation. Fintech (financial
tions. Organizations with inclusive green organization policies can technology) has been accredited with endorsing the implementa-
get admittance to suggestively greater lines of credit, T. Muganyi, Y. tion of green farming applies in India by confirming credit acces-
Linnan, H.-p. Sun [13]. Indians Public sector banks are in concert a sibility, speaking data irregularity, and trust among agricultural
progressively foremost role in the apportionment of green finance communities, Marke, A, ed [22]. Practical evidence demonstrates
in credit marketplaces. This advantage has derived at a charge, as that Indian internet expansion has had an identified adverse impact
green finance enterprises lead to be more moneymaking for private on crude oil consumption through endorsing financial growth and
banks than public sector banks. Public sector banks are obligated to manufacturing promotion, Fu, Jonathan, and Mrinal Mishra [23]. As
take on more risks to encounter green finance strategy and objec- India's fintech network continues to develop, it is probable to play a
tives, World Bank, (2019). Public sector Banks must focus on significant role in its changeover to new green finance. Fintech
motivating green finance battered at accomplishing green stands to accelerate the obtaining and distribution of funds
changeovers created on steady prices and developed technology to reserved for environmental developments, P. Schulte and G. Liu
attain supportable environmental results, Zhou, K., Li, Y., [16]. Green [24]. Green finance bonds can assist the financial concert of fintech
finance strategies should also contemplate the technology assur- businesses while so long as a channel for long-term green savings,
ance that stimulus the whole monetary scheme and value chains Khan, M.T.I., Yaseen, M.R., Ali, Q., [10]. Fintech can accelerate India's
technology to accomplish optimum outcomes, Sreenu N [1]; Sreenu shift to new green finance that will encourage disinfectant pro-
N [2]; Sreenu N [3]. For green finance to accomplish its aims, there duction through bright manufacturing processes. Based on the
is the requirement for robust procedures that information above literature review and determining the relationship between
914
S. Nenavath Renewable Energy 193 (2022) 913e919

Fintech and green finance, the paper designed the following hy- which denotes the provisional probability of actuality portion of
potheses 2 and 3. the policy remedy class is represented by the following uniqueness:
uðxz Þ ≡ TðSt ¼ 1Þ=yz . The tendency score for the SDIDM estimator
Hypothesis ¡2. Fintech growth has an insignificant impact on
can be assessed using an LLP model (linear programming proba-
SO2 (Sulfur Dioxide) emissions.
bility), as recommended by Houngbedji, K [25]. The linear pro-
Hypothesis ¡3. Fintech growth has a significant impact on gramming probability model tendency score can be derived from
environmental investment project enterprises. the following formula (5).

4. Research methodology X
c
uðyz Þ ¼ bo þ b1 *y1 þ b2i *yi2 (5)
i¼1
This paper employs the text analysis approach to recognize
when connected green finance policies were pretentious across the From the formula (5), where variables are assessed applying the
28 states and 8 Union India. The research paper has collected data OLS model and y1 is representing a binary value. The direction of
for the period from 2010 to 2020. To classify the pertinent treat- the polynomial function applied to estimate the tendency score for
ment effects, and employed the following variables: Environmental LLPM is given as C and yi2 does the following illustration signify a
safety, Green Finance, Fintech, green consumption, green bond, continuous variable: yi2 ¼ uij ¼ 1y2. This study mainly emphasizes
credit, operations, CO2 finance, and systemic risk. These green
significantly three environmental variables to evaluate the effect of
finance strategy innovations differ from each state and union ter-
green finance associated procedures. The dependent variables are
ritory, but they all have the same purpose in mind to encourage
emphasized in the following illustration; yz (In SO2Eit, In SDDit, and
environmental safety innovation. Controllers in India are strong on
VSO2it). SO2Eit signifies sulfur dioxide emission, SDDit signifies
accomplishing their temperature and environmental safety goals
Smoke and Dust Discharge, and VSO2it Volume of Sulfur Dioxide
and green finance benefits have been recognized as a key signifi-
produced. The climate quality protection interest variables are
cant area. India is progressive in its efforts to make a green financial
calculated in tonnes for every 28 states and 8 union territories, I, at
scheme intended to serve the nation to meet its CO2 discharge
time t. The time variable in the SDIDM considers the value of 1
decrease marks and changeover into a more maintainable
while a green finance associated rule is exaggerated and 0 at the
manufacturing production model.
starting point.

4.1. A model developed

The green finance strategies in India comprise numerous follow- 4.2. Control variables
up inventiveness to confirm set targets goals are met. An SDID
model is used. SDIDM is the finest appropriate for investigating The paper examines the control variables that Yit is used in the
climate quality protection properties created based on panel data developed model are the level of industrial development in every
with various circles of policy procedures to examine the first hy- state and Union Territory IDit, determines as a minor industry
pothesis, Houngbedji, K [25]. The average remedy effect (ARE) on development value-added as a % of GDP. The paper used the GDP
Indian states and union territory can be denoted by equation one per capita income signified by GDP_PCIit to regulate the per cent of
below. economic growth and size.

ARE ¼ Eðx1t
xot = St ¼ 1Þ (1)

From the equation (1). Where, x1t represents the environmental 4.3. Fintech growth effects on environmental safety
variable after green finance factors associated with strategies are
put into result at time t and xot indicates the similar variable earlier The fintech industry is growing speedily in India, and the paper
average remedy effect, indicates whether states indorsed green has framed the hypothesis. Hypothesis
2 is dependent on the
finance associated with policy issues at period t. when t is not equal expectation that the fintech business development has donated
to 0 after the starting point is equal to 1. Houngbedji, K. [25] pro- notably to the deterioration of manufacturing gas emissions in In-
poses a reweighted estimation of the ARE in the given formula no dian states and union territories. Fintech is fundamental to a
two to report the inconsistency of characteristics between remedy limited green initiative plus the distribution economy. The paper
and un-remedy classes. uses the econometric model stated as follows to examine hypoth-
esis two.


xt
xz St ¼ uðyz Þ
E * (2)
TðSt ¼ 1 1
uðyz Þ SO2Eit ¼ b0 þ b1 þ bcv Control Variableit
1 þ b1 Fintechit
1 þ ait
(6)
Houngbedji, K. [25]; weighted estimation from the equation (2)
is impartial if in the given formulas under as (3) and (4). From equation (6), where the standard condition of variable
SO2Eit signifies Sulfur Dioxide Emissions in the study area, i, at time
Eðx1t
xot = St ¼ 1; yz Þ ¼ Eðx1t
xoz = St ¼ 1; yz Þ (3) t and Fintechit-1 is the lagged fintech is one of the significant vari-
ables. The index employs many Indian companies like Paytm,
weighted estimation from the equation (2) is impartial if in the MobiKwik, lending kart technologies, razor pay software, etc …
given formulas under as (4). inclusive data on fintech practice across India and making digital
levels and other key factors. Lagged control variables include states'
TðSt ¼ 1Þ > 0 and uðxz Þ < 1Þ (4)
GDP per capita income (SGDPpciit-1). The next one is trade open-
From the equations (3) and (4), the paper describes the, xt
xz is ness (TOit-1), and the last one is industrial development (IDit-1). To
the transformation in the climate protection curiosity variable apprehension the municipal pollution within each state and union
related to starting point z and t (time). Starting point features of the territory and comprise the present level of industrial smoke
control variables are signified by yz. The tendency score per cent releasing and dust, signified by SDDit.
915
S. Nenavath Renewable Energy 193 (2022) 913e919

further also uses the policy text analysis database and the text
SO2Eit ¼ b0 þ b1 Fintechit
1 þ b2 SDDit þ b3 GDPpciit
1 analysis has explored an inclusive compilation of green finance
þ b4 IDit
1 þ b5 TOit
1 þ ait (7) relationship with policies guidelines in India. The text analysis
database information and panel data-based data collected from the
From the same order to test the third hypothesis, the study uses CMIE reports (2019), the information or database published by
each state and union territory's available data on environmental Indian regulatory bodies, at the state level and national levels. The
safety and investment in environment growth. Fintech is antici- research paper has collected data from the following significant
pated to have a positive impact on quality environmental protec- keyword from the CMIE reports, green finance, green credit, green
tion and investment spending on forest development, after wide bond and mention variables used for the data analysis in the cur-
discussion we have used an econometric model to assess the out- rent research paper, and the variables indicates in Table 1.
comes with the help of the following equation: The descriptive statistics of Table 2, discussed the green finance
strategies and policies related outcome, the results show that after
EOIst ¼ b0 þ b1 Fintechst
1 þ b2 RSIWst þ b3 GSEst implementation of the green finance project, the industrial gas
þ b4 GDPpcist
1 þ b5 IDit
1 þ b6 TOit
1 þ ait (8) emission drastically reduced and environment quality also
improved, the Table 2 and 3 results indicates that the green in-
From equation (8), the dependent variable is quality protection vestment is a playing very significant role for the climate protection
of environmental obstruction investment represented by EOIst. for and developments. The Semi-parametric Difference-in-Differences
Indian states and Union Territories, j, at time t. The per cent of approach pursues to apprehension how these green finance pol-
fintech growth in each state and union Territory is given as Fin- icies are affected environmental results across Indian states.
techst-1, which is a lagged value selected variable. The main vari- Further, also Table 2 explores highlights the characteristics of var-
ables are alike to what the study has used for the states and Union iables in the study sample.
Territories. The research also extends the econometric estimate
model to include other quality protection of the environment as the
control variables, such as RSIWst, which denotes the solid indus- 5.1. Green finance vs environmental quality protection
trial waste recycling rate, and GSEst, which represents the gas
waste emissions in Indian states and union territories. This paper uses the Semi-parametric Difference-in-Differences
estimator to test the Linear Probability Model (LPM) and Series
4.4. Testing for cross-sectional dependence: panel data models Logit Estimator (SLE) approaches to see if green finance policies are
implemented across Indian states. If green finance policies are
The cross-sectional dependency test can examine estimation implemented, it will lead to positive environmental quality pro-
outcomes, Sarafidis, V., & Wansbeek, T [26]. This paper will inves- tection results. The LPM is used in order four. Dependent variables
tigate the Sarafidis, V., & Wansbeek, T cross-sectional correlation are comprising SO2 emissions and capacity of production as well as
dependence test. the release of industrial smoke and dust. The SDID estimation
outcomes for both test LPM and SLE are obtainable in Table 3.
sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi2 3
X X
N
1 N The SDID model estimation outcomes confirm the hypothesis
1 4 d
CDp ¼ Pij 5 / Nð0:1Þ (9) one that the green finance associated policies guide to shows the
NðN
1Þ i
i¼1 j¼iþ1 positive quality of environmental protection results. The climate
interest variables have indicated substantial negative coefficients
The t cross-sectional correlation test holds the fixed values, the
for the Linear Probability Model and Series Logit Estimator models
cross-sectional correlation dependence test is calculated applying
in Table 4. Green finance-associated policies executed between the
the following formula. From equation (9), the equation illustrates
duration of 2010e2020 in Indian states and union territory have
Pij, the error term pairwise-correlation sample estimate. For a fixed-
P had an inclusive adverse impact on industrial gas release pro-
effects homogeneous panel data model with N (0,1).
ductions. Inclusive, applying Series Logit Estimator outcomes,
green finance-related policies have led to a 27% deterioration in
5. Data analysis and interpretation SO2E, a 17% deterioration in the release of gas and smoke discharge
from manufacturing industries, and an 18% deterioration in the
This paper uses panel data related to green finance projects and capacity of SO2E released in Indian states and union territory
fintech, the information has been collected from 2010 to 2020. during the study period.

Table 1
Variables and source.

Variables Explanation Measurement

SO2E Sulfur Dioxide Emissions released in tonnes (log)- Sulfur Industrial smoke and we can measure in tonnes (log)
dioxide and chemical compound
SDD Smoke and Dust Discharge Release of industrial smoke and measure in tonnes (log)
VSO2D The volume of Sulfur Dioxide Industrial smoke and measure in tonnes (log)
Fintech Fintech Index market-cap-weighted index
RRISW The recycling rate of industrial solid waste Divide your monthly recycling quantity by the total amount of solid waste you generate and use the
same unit(s) of measurement for both recyclables and garbage
IWGE Industrial waste gas emissions Industrial waste released gas; we can measure in 100M cubic meters (Log)
GDP_PCI Gross domestic Product-Per capita Income Gross Domestic Product (GDP) per capita shows a country's GDP divided by its total population
TO Trade openness the ratio of the arithmetic means of merchandise exports (x) and imports (m) to GDP (y)
GFP Green Finance policy Binary variable 1 for policy & 0 for no policy
Ind Industrialization Industrialization is the period of social and economic change that transforms a human group from an
agrarian society into an industrial society

Source: Author calculation

916
S. Nenavath Renewable Energy 193 (2022) 913e919

Table 2 investment across the Indian states on green finance projects.

Descriptive statistics. The Pesaran CSD result value indicates that hypothesis 3 has
Variables N Minimum Maximum m s been accepted because the significant value is lesser than 0.05 at
SO2E 1134 0.947 6.018 6.115 0.241
the 5% level (SO2Eit ¼ 0.001). The demonstration that Indian states
SDD 1068 3.719 7.347 6.631 0.274 (Source: CMIE Report), that the errors correction of panel data
VSO2D 8351 0.738 7.458 7.402 0.367 analysis shows the significant impact on environmental quality
Fintech 1241 1.092 3.603 3.826 0.403 protection and the panel data also show the positive to CSD. Table 5
GDP_PCI 1492 1.726 6.147 6.304 0.614
results have accredited to structural factors and economic shock-
TOP 1074 4.360 8.835 6.281 0.179
GFP 1241 0.831 2.386 2.526 0.482 waves indicate the negative impact on industrial gas emissions in
Ind 1307 0.031 1.307 0.318 0.201 Indian states during the study area (2010e2020). The CSD (cross-
Source: Author calculation
sectional dependency) and FEM (Fixed effect model) estimate the
results with collected standard errors in Table 5. The ESIjt (Envi-
ronmental investment) value explain that the P values (P ¼ 0.203)
Table 3 are higher than the 0.05 accepted value, based on Table 5, results,
The Indian states and union territory: green finance policies issues and the green finance shows that negative impact on environmental
characteristics.
quality protection. The ESIjt (Environmental investment) demon-
Variables Sample GFP Non-GFP Diff. strates that the paper has failed for the paper data analysis because
GFP 0.017 (0.216) the H0 value has been indicated insignificant. The estimation out-
SO2E 5.136 (0.027) 5.173(0.132) 4.121(2.001)
0.281***(0.002) comes for the Indian states and union territory their data analysis is
SDD 5.169(0.208) 4.145(0105) 6.163(0.043)
0.172***(0.005) examined and represented in Table 5.
VSO2D 7.048(0.407) 6.174(0.115) 3.472(0.051)
0.091*(0.010)
From Table 6, the estimation outcomes demonstrate that fintech
Ind 1.094(0.137) 1.903(0.281) 2.301(0.381)
0.012***(0.015)
TOP 4.284(0.739) 4.152(0.136) 3.193(0.037) 0.127***(0.006) growth in India 28 states and union territory has shown that the
GDP_PCI 6.157(0.147) 5.050(0.038) 4.210(0.428) 0.093***(0.007) negative impact on industrial gas and smoke releases, the fintech
N 1241 428 826 1241 value indicates (1.155*** (0.151) higher than the accepted value
Sources: S.E are in parentheses. Significance is represented as at *10% level, ** 5% (P ¼ 0.05) and the values also indicates a negative impact on in-
level, and *** 1% level. dustrial gas and smoke release. The second step result also in-
dicates in Table 6 related to the fintech (Finance technology)
variable has a coefficient of
0.142***(0.138), this present value
5.2. Fintech (financial technology) vs environmental quality specifies that a 1% level improve fintech progress contributes to a
protection 14.2% decrease in the S02E Indian states and union territory and it
has shown the negative impact on SO2E. The Fintech outcome is an
The research paper examines the effect of fintech development innovative tool and its ideas to the role fintech can play in simpli-
on industrial gas emissions released, for this statement, the second fying conversion to a green financial structure and environmental
hypothesis has supported to estimate the significant value, the quality protection. Fintech companies can play a vital role to reduce
significant values have shown the positive impact on environ- the SO2 and CO2 emission in the Indian states and union territory,
mental quality protection at 5% level (p ¼ 0.05). Further, also the of the results also indicates that green finance can improve climate
paper estimates the significant value with help of the equations (7) quality.
and (8) by applying the FEM (fixed-effects model), the FEM results Table 7 results illustrate that fintech (finance technology) en-
illustrate that fintech shows a negative impact on environmental courages climate quality protection and attract more green finance
quality protection during the short run. Finally, the researcher used investment projects. The fintech coefficient value is stated in
a similar approach model to estimate the relationship between the Table 7 and the coefficient value is 0.226, which is at the level of 5%,
fintech and environmental quality from equations (8) and (9), the and the fintech facilities have increased, at the state and union
similar model results show that the relationship between fintech territory level. and the green finance investment facilities also in-
and environmental quality is significant in a long run. In this crease to protect the environmental quality, the investment
connection, the second hypothesis has been accepted, after the increased by 22.6%. The results from Table 7, also demonstrate that
positive impact on the environment, it has attracted more the systemic risks of fintech increased while doing more

Table 4
The Impact of Green Finance on Environmental quality Protection.

Environmental Variable -ARE Linear Probability Model Series Logit Estimator

1 SO2E 2 SDD 3 VS02D 4 SO2E 5 SDD 6 VS02D

Constant
0.351*** (0.063)
0.238*** (0.070)
0.100** (0.081)
0.270*** (0.064)
0.170*** (0.061)
0.188** (0.072)
N 937 852 684 1193 906 828

Sources: the variables (1, 2, & 3) are stated applying a Linear Probability Model of degree. Variables (4,5 & 6) are stated applying default Series Logit Estimator. Significance is
signified as follows: ***1% level, **5% level and *10% level.

Table 5
Cross-sectional Dependency Test output.

SO2Eit ESIjt

CSD statistic P e Value (significance) CSD statistic P-value (insignificance)

47.147 0.001
0.008 0.203

Source: Null hypothesis shows that the errors are weakly CSD ~ N (0,1) and the significance level indicates that the *** is at the 1% level, ** 5% level and * 10% level.

917
S. Nenavath Renewable Energy 193 (2022) 913e919

Table 6
Fintech (Financial technology) Vs IGE (Industrial Gas Emissions).

Variables Selection criterion SO2Eit

1 2

Fintechit-1 (Financial Technology)
1.155*** (0.151)
0.142***(0.138)

SDDit (Smoke and Dust Discharge) 0.360***(0.141)
GDP_PCIit-1 (gross domestic produc_per capita)
0.061***(0.068)
0.721***(0.035)
Toit-1 (Trade openness business) 0.021(0.130) 0.103***(0.107)
Indit-1 (industrialization growth) 0.380***(0.126) 0.788***(0.071)
Indian states and union territory EFM (Fixed Effect Model) Yes-Applied Yes-Applied
Study period (year Fixed Effect Model) Yes-Applied Yes-Applied
N 739 723
F-Statistics 67.147*** 72.062***
R-Square 0.277 0.441

Source: Null hypothesis shows that the errors are weakly CSD ~ N (0,1) and the significance level indicates that the *** is at the 1% level, ** 5% level and * 10%
level.

Table 7
The Impact of Fintech on Indian states and union territory environmental safety investment model.

Variables Selection criterion ESIjt

1 2

Fintechit-1 (Financial Technology) 0.012***(0.135) 0.226***(0.137)

RRISWjt 0.102**(0.139)
IWGEjt
0.087(0.011)
GDP_PCIit-1 (gross domestic produc_per capita) 0.146***(0.106) 0.043***(0.106)
Toit-1 (Trade openness business)
0.451**(0.144)
0.691*(0.142)
Indit-1 (industrialization growth) 0.052***(0.103) 0.173*(0.117)
Indian states and union territory EFM (Fixed Effect Model) Yes-Applied Yes-Applied
Study period (year Fixed Effect Model) Yes-Applied Yes-Applied
N 153 153
F-Statistics 8.135 7.680
R-Square 0.169 0.185

Source: Null hypothesis shows that the errors are weakly CSD ~ N (0,1) and the significance level indicates that the *** is at the 1% level, ** 5% level and *
10% level.

transactions of environmental projects, it has the latent to inclusive green finance and fintech associated with policies lead to
encourage green finance enterprises that frequently the much- a positive impact on environmental protection. The paper originally
required financial resources to invest protecting the environment paper is fintech growth significantly contributes to reduced in-
and stoppage of new projects. dustrial gas emissions (IGE) and augments environmental protec-
tion investment initiatives (AEPII).

6. Conclusion
Implication
The green finance system is not an international trend, but it has
become a significant frequency for technologically advanced Based on the conclusion, the paper has drawn the following
Countries to accomplish sustainable development. India is the one policy implications related to green finance and fintech: (1) The
of emerging and leading nations to execute and implement green Indian Financial system need to accelerate the growth of green
finance and fintech in the world. The Indian financial system finance products and boost the capacity of financial institutions and
strongly supported the green finance and fintech facilities in banking industries to offer green credit facilities. (2) There is a great
environmental protection projects and also permitted the green need for more investment into the basic investigation on how green
finance credit facilities at the macroeconomic policy level. The RBI finance products can be executed while modifying related risks. (3)
framed the guidelines on green finance products and provided fast- Supervisors should promote the financial technologies (fintech)
track benefits to the financial system. According to RBI (2016), and actively can participate in green finance projects to protect the
green finance facilities can decrease credit risk, rise financial environmental quality and development of the new financial in-
openness, and encourage sustainable growth. Green finance and stitutions to promote the fintech and green finance, while also
fintech are innovative financial tools for the protection of envi- reducing the systemic risk in fintech in particularly finance and
ronmental quality and proper resources utilization for the banking sectors.
achievement of the sustainable target. Green finance can guide the
flow of funds and achieve actual risk environmental management Limitation
and the finest allocation of environmental resources. The effective
regulation of green finance and fintech policies will avoid the in- This research paper has certain limitations that the Limited data
formation asymmetry singularity and solve the moral threat. The availability meant the paper could not comprehensively examine
creation of environmental protection should consider setting up the heterogenous factors and the factors affect on shows on the
the mechanism of efficient green finance system coordinating the research questions in long-term. The nonexistence of appropriate
relationship between the ecology and finance. Applying the semi- instrumental variables is limited to this paper and the ability to
parametric difference-in-differences (SDID) model evidenced that report on endogeneity and simultaneousness challenges. Despite
918
S. Nenavath Renewable Energy 193 (2022) 913e919

these aforesaid restrictions, this study also offers significant in- Sustain. Energy Rev. 67 (2017), 1105e1122.
[9] X. Deng, Z. Huang, X. Cheng, FinTech and sustainable development: evidence
sights on how green finance and fintech growth can play a dynamic
from China based on P2P data, Sustainability 11 (2019) 6434.
role in encouraging environmental safety and sustainable [10] M.T.I. Khan, M.R. Yaseen, Q. Ali, The dynamic relationship between financial
development. development, energy consumption, trade and greenhouse gas: comparison of
upper-middle-income countries from Asia, Europe, Africa and America,
J. Clean. Prod. 161 (2017), 567e580.
CRediT authorship contribution statement [11] U.K. Pata, Renewable energy consumption, urbanization, financial develop-
ment, income and CO2 emissions in Turkey: testing EKC hypothesis with
Sreenu Nenavath: Conceptualization, Literature Review, Inves- structural breaks, J. Clean. Prod. 187 (2018), 770e779.
[12] A. Stoian, F. Iorgulescu, Fiscal policy and stock market efficiency: an ARDL
tigation, Methodology, Software, Writing e original draft, Prepa- Bounds Testing approach, Econ. Modell. 1e11 (2020).
ration, Writing e review & editing. [13] T. Muganyi, Y. Linnan, H.-p. Sun, Green finance, fintech and environmental
protection: evidence from China, Environ. Sci. Ecotechnol. 26 (2021) 14e25.
[14] Y. Wang, J. Li, The spatial spillover effect of non-fossil fuel power generation
Declaration of competing interest on carbon dioxide emissions across China's provinces, Renew. Energy 136
(2019), 317e330.
The authors declare that they have no known competing [15] K.S. Nenavath Sreenu, S. Rao, D. Kishan, The macroeconomic variables impact
on commodity futures volatility: a study on Indian markets, Cogent Bus.
financial interests or personal relationships that could have Manag. 8 (1) (2021), 1939929.
appeared to influence the work reported in this paper. [16] K. Zhou, Y. Li, Carbon finance and carbon market in China: progress and
challenges, J. Clean. Prod. 214 (2019), 536e549.
[17] B.E. Gaddy, V. Sivaram, T.B. Jones, L. Wayman, Venture Capital and Cleantech:
References
the wrong model for energy innovation, Energy Pol. 102 (2017) 385e395.
[18] I.M. Herremans, J.A. Nazari, Sustainability reporting driving forces and man-
[1] N. Sreenu, An econometric time-series analysis of the dynamic relationship agement control systems, J. Manag. Account. Res. 28 (2016), 103e124.
among trade, financial development and economic growth in India, Asian [19] A. Geddes, T.S. Schmidt, B. Steffen, The multiple roles of state investment
Econ. Financ. Rev. 9 (No. 2) (2019a) 155e165. banks in low-carbon energy finance: an analysis of Australia, the UK and
[2] N. Sreenu, The effects of oil price shock on the Indian economyda study, Germany, Energy Pol. 115 (2018) (2018) 158e170.
Indian Econ. J. 66 (1e2) (2019b) 190e202. [20] E. Macchiavello, M. Siri, Sustainable finance and fintech: can technology
[3] N. Sreenu, A study on financial constraints of capital structure theories and contribute to achieving environmental goals? A preliminary assessment of
dividend policy: evidence from Indian capital market, J. Int. Bus. Enterpren. ‘green FinTech, Eur. Bank. Inst. Work. Pap. (2020) 71.
Dev. 12 (1) (2019c) 22e36. [21] Huang Deng, Cheng, FinTech and sustainable development: evidence from
[4] U. Volz, Fostering Green Finance for Sustainable Development in Asia”, vol. China based on P2P data, Sustainability 11 (22) (2019).
814, ADBI Working Paper Series, 2018. [22] A. Marke (Ed.), Transforming Climate Finance and Green Investment with
[5] Nenavath Sreenu, Cashless payment policy and its effects on economic growth Blockchains, first ed., Elsevier, London, 2018, 9780128144480.
of India: an exploratory study, ACM Trans. Manage. Inf. Syst. 11 (3) (2020), 15, [23] Jonathan Fu, Mrinal Mishra, The Global Impact of COVID-19 on Fintech
10. Adoption, Swiss Finance Institute Research Paper, 2020. No. 20e38.
[6] F. Abbasi, K. Riaz, CO2 emissions and financial development in an emerging [24] P. Schulte, G. Liu, FinTech is merging with IoT and AI to challenge banks: how
economy: an augmented VAR approach, Energy Pol. 90 (2016), 102e114. entrenched interests can prepare, J. Altern. Investments 20 (3) (2017) 41e57.
[7] Danish, R. Ulucak, S.U.D. Khan, Determinants of the ecological footprint: role [25] K. Houngbedji, Abadie's semiparametric difference-in-differences estimator,
of renewable energy, natural resources, and urbanization, Sustain. Cities Soc. STATA J.: Promot. Commun. Stat. Stata 16 (2) (2018) 482e490.
54 (2020), 101996. [26] V. Sarafidis, T. Wansbeek, Cross-sectional dependence in panel data analysis,
[8] S. Nasreen, S. Anwar, I. Ozturk, Financial stability, energy consumption and Econom. Rev. 31 (5) (2011) 483e531.
environmental quality: evidence from South Asian economies, Renew.

919