Fostering environmental sustainability: An analysis of green investment and digital financial inclusion in China using quantile-on-quantile regression and wavelet coherence approach

This study explores the opportunities for enhancing environmental sustainability in China through a meticulous examination of the interrelations among green investment, digital financial inclusion, and environmental sustainability. An innovative tripartite methodology encompassing quantile-on-quantile regression, Granger causality in quantiles, and wavelet coherence analysis, complemented by extensive robustness checks is employed to unveil nuanced insights. The findings reveal a robust positive interrelation between green investment, digital financial inclusion, and environmental sustainability, notably within middle to upper quantiles of environmental sustainability, extending across varying levels of digital financial inclusion and environmental sustainability quantiles (0.05-0.95). This synergy is pivotal in middle to high quantiles of both green investment and digital financial inclusion, signifying the critical role of each in environmental conservation. The research accentuates the imperative of strategic investments in eco-friendly innovations and the financial sector to usher China towards a sustainable developmental paradigm. Overall, the findings suggest that green investment, financial inclusion, and play a critical role in enhancing environmental sustainability of China's current economic growth. This study provides valuable insights for developing countries seeking to achieve sustainable development goals through leveraging green investment, and digital financial inclusion.