Politická ekonomie X:X | DOI: 10.18267/j.polek.1518

How do digital government and digital finance promote green investment?

Ilhan Ozturk, Sana Ullah
Ilhan Ozturk, College of Business Administration, University of Sharjah, Sharjah, United Arab Emirates; Faculty of Economics, Administrative and Social Sciences, Nisantasi University, Istanbul, Turkey; University of Economics and Human Sciences in Warsaw, Warsaw, Poland
Sana Ullah (corresponding author), Faculty of Economics and Administrative Sciences, Near East University, Nicosia, Northern Cyprus, Turkey; University of Economics and Human Sciences in Warsaw, Warsaw, Poland; Advanced Research Centre, European University of Lefke, Lefke, Northern Cyprus, Turkey

In order to tackle climate change and global warming, policymakers all around the globe have stressed fostering investment in green initiatives and projects. Particularly in top polluted economies, the importance of green investment has recently increased manifold. Thus, researchers have focused on finding the determinants of green investment. This analysis aims to scrutinize the link between digital government, digital financial inclusion, and green investment nexus in top polluted economies by employing two-stage least squares (2SLS), generalized method of moments (GMM), and smoothed instrumental quantile regression (SIVQR) methods. In addition to analysing an aggregate sample of top polluted economies, we have performed a regional analysis by disaggregating the data. The findings reveal that digital financial inclusion boosts green investment in the full sample, Asia, America, Europe, and Africa, while the digital government promotes green investment in all regions except Africa. The control variables of GDP, carbon emissions, foreign direct investment, and human capital foster green investment in top polluted economies, while trade reduces green investment in these economies. On the policy front, an integrated approach with a central focus on digital governance and financial inclusion is required to boost green investment.

Keywords: Digital government, green investment, digital finance

Received: December 31, 2024; Revised: May 17, 2025; Accepted: June 9, 2025; Prepublished online: December 16, 2025 

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