UNLOCKING ENVIRONMENTAL INNOVATION: DO BIGTECH AND FINTECH CREDIT EASE FINANCIAL CONSTRAINTS?

Abstract

This study examines the impact of financial constraints on firms’ environmental innovation, with a particular focus on the moderating role of alternative financing. Using cross-country data from 2013 to 2019, we find that a one-standard-deviation increase in financial constraints (measured by KZ_index) is associated with a 6.9% decline in environmental innovation. However, BigTech credit significantly mitigates this effect, offsetting nearly 39% of the adverse impact, whereas FinTech
credit shows no comparable influence. These findings highlight the importance of financial capacity in supporting environmental innovation and suggest that BigTech credit may serve as an effective enabler of sustainable investment.