Green finance is increasingly viewed as a critical mechanism for accelerating environmental recovery and sustainable development, yet existing research tends to focus on outcomes rather than drivers. We examine firm-level determinants of green finance in Saudi manufacturing firms during 2010–2021, focusing on energy market competitiveness, environmental regulation, and green innovation. The analysis uses panel data from 35 firms and methods including partial least squares, GMM, fixed effects, and random effects to ensure robustness. Our results show that stricter environmental regulation and greater market competitiveness significantly enhance green finance performance. Crucially, product-oriented green innovations lead to quicker adoption of green finance than advanced eco-innovations, likely because they offer faster financial returns. By identifying these policy and market drivers in an oil-dependent economy, the study provides actionable guidance for regulators and managers to calibrate environmental rules, strengthen competitive conditions, and accelerate investment in cleaner production and sustainable finance, supporting Saudi Arabia’s sustainable development goals.
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