Conceptualizing green finance: findings from textual and network analysis

Abstract

Green finance has seen increased attention from academic researchers and policymakers due to its relevance in mitigating climate change and achieving environmental sustainability goals. Despite the exponential rise in its research publications and policy articles, there remains a lack of uniformity in the scholarly understanding of green finance. The lack of proper understanding and fragmented definitions further impede this domain's theoretical and practical advancements. Thus, it brings much subjectivity to green finance research as it becomes manipulated through different definitions. The current study addresses this significant research gap by systematically analyzing 126 green finance definitions sourced from research articles and different organizational reports of international repute. Through advanced textual analysis, co-word network analysis, and topic modelling through latent dirichlet allocation, the present study identifies the key dimensions of green finance and their interrelationships, culminating in a better understanding of these definitions. The study findings reveal ten core dimensions: environmental, sustainability, energy, finance, economic, institutional, technology, green, societal and sectoral, highlighting their centrality in shaping the existing green finance research definitions. The present study makes a significant critical contribution to advance the scholarly discourse on green finance by providing a strong foundation through the data-driven analysis of the existing definitions. It has significant practical implications, offering a standardized conceptual framework that policymakers, financial institutions, and international organizations can adopt to design sustainable financial products, align regulatory frameworks, and foster global collaboration.