Achieving sustainable growth in emerging economies: Insights from advance method moment of quantile regression

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Given the escalating climate change, economies are concerned for the attainment of sustainable economic improvements. Hence, abiding by the objective of sustainability while stressing the conception that increasing financial progress should not subside the country's environmental advancements, the current study examines the asymmetric effect of Environmental taxes, financial globalization, and external debts on the financial and green growth of emerging economies. In doing so, the study utilized the novel estimation of the Method-of-Moment Quantile Regression (MMQR) to identify the presence of asymmetric association among the studied variables. The empirical findings reported that environmental taxes play a critical role in advancing green growth in emerging economies. As for external debt, the outcome reveals that an increase in external debts decreases the level of green growth suggesting the inefficiency of emerging nations in utilizing external debts for the betterment of countries’ sustainable growth. For financial globalization, the study reported the asymmetric relationship. At a higher level of green growth, financial development tends to improve green development but decreases green growth in lower quantiles. Similarly, the results demonstrate that an increase in external debt increases financial development at lower quantiles but decreases financial advancements at higher quantiles. Likewise, financial globalization helps to improve the conditional quantiles of financial development for selected emerging countries. As for environmental taxes, the findings revealed a negative relationship of the variable with financial development in lower quantiles but positive in middle to high quantiles. Observing the highly asymmetric associations between the studied variables, the current study calls for the need for efficient fiscal policies for directing the positives of external debt and financial globalization from financial development to green growth with proper allocation of green taxation while facilitating green financial efforts such as eco-investments, renewables projects, green innovations with higher stringency in green policies.