Green finance, innovation, and firm resilience: Econometric evidence from global data

This study examines the role of green finance and green innovation in strengthening firm resilience using global data and a distribution sensitive econometric framework. The analysis employs quantile regressions, instrumental variable methods, local projections, and nonlinear threshold models to capture heterogeneous, dynamic, and state-dependent effects. The results indicate that green finance significantly enhances firm resilience, with the strongest effects observed among financially fragile firms. Green innovation emerges as a key transmission channel through which green finance improves adaptive capacity and shock absorption. Dynamic estimates indicate that resilience gains are persistent over time, while nonlinear evidence reveals that the effects intensify during periods of elevated financial stress. These findings indicate that green finance functions as a stabilizing mechanism rather than merely a performance enhancer. The study contributes to the sustainable finance literature by highlighting the resilience and financial stability implications of green finance and innovation.