This study investigates the impact of green finance on climate resilience, with a focus on the moderating role of green innovation in Pakistan, a lower-middle-income developing economy.
Using generalized method of moments (GMM) estimations for the period 2015–2024, the study examines how financial mechanisms contribute to climate resilience and sustainable outcomes.
The results demonstrate that green finance significantly enhances climate resilience in Pakistan. Green innovation strengthens this relationship by acting as a catalyst in transforming financial flows into sustainable development. The findings are theoretically grounded in the resource-based view, the resource dependence hypothesis and innovation diffusion theory. Robustness checks with alternative econometric techniques confirm the reliability of the results.
The findings suggest policy actions for lower-middle-income economies, such as strengthening the green finance ecosystem through regulatory harmonization, capacity building and promoting public–private partnerships.
This study provides novel evidence on how green finance and green innovation jointly foster climate resilience in developing economies, offering insights for both academia and policymakers in advancing climate-resilient growth.
