Impact of financial technology innovation on sustainable transition finance: the moderating role of globalization in BRI, advanced and emerging economies

This study aims to investigate the impact of financial technology innovation on sustainable transition finance with the moderating role of globalization. The strongly balanced panel dataset of Belt and Road Initiative (BRI) considered based on the dependent variable availability. Therefore, the sample consists of 23 emerging and 19 advanced countries, including 42 BRI partners from 2013 to 2021. This study considers institutional quality and socioeconomic conditions as control variables. Also, COVID-19 as the shock treatment effect of dummy variable is used. Based on the co-integrations and causality analysis as well as baseline tests the two-step Sys-GMM technique is employed and further robust check using 2SLS, dynamic and fixed effect regressions. Findings reveal a positive influence of financial technology innovation on sustainable transition finance, particularly in BRI and advanced countries, while posing challenges for emerging ones. Additionally, globalization demonstrates mixed effects, positively contributing to advanced BRI nations. Notably, the interaction of financial technology innovation and globalization significantly promotes sustainable transition finance. Still emerging need significant improvement as institutional quality emerges as a crucial factor, especially in advanced countries, while socioeconomic barriers hinder progress emerging countries. These findings offer valuable insights for stakeholders and contribute to understanding the intricate dynamics of finance within a sustainable global framework, with implications for financial institutions, policymakers and researchers, especially for emerging BRI partner countries.