Financial development, digitalization, and the trajectories of sustainable development

In pushing of the projects of "the Guanzhong-Tianshui Economic Zone" and "Xian-Xianyang Integration",financial development in Shaanxi has also become one of the important topics of current research.On the basis of the theory of financial sustainable development,this paper builds evaluation index system of the financial sustainable development and using empirical analysis in this paper.At the same time,its doing comparative research of financial sustainable development level of the eight major cities in Shaanxi.This papers aim is to provide some recommendations about financial policies and development strategies for the relevant departments.

ABSTRACTDrawing upon theoretical studies on the policy impact of political parties, this article address cross-national differences in financial policy choice and capital market development in Malaysia and Thailand. An explanatory approach that considers inter-party organisational dimensions in tandem with intra-party structural attributes shows that financial and regulatory policies have varied significantly between Malaysia and Thailand in response to the national configurations of political parties. The different patterns of policy choices, in turn, have led to varied capital market structures and development trajectories. Thus the theoretical literature on the political economy of financial capitalism in developed countries, which stresses the importance of domestic political institutions, has implications for the political underpinnings of financial market reforms in emerging market countries.

China currently is the world's largest energy consumer and carbon dioxide emitter. How to effectively control carbon dioxide emissions and promote sustainable development is indispensable for achieving the “double carbon” goal, promoting comprehensive economic transformation and upgrading, and contributing to high‐quality economic development. There is no doubt that a large amount of financial resources need to be invested in the process of encouraging sustainable development. Therefore, what is the relationship among financial development, carbon dioxide emissions and sustainable development? Can financial development facilitate sustainable development? In order to answer these two key questions, this article uses entropy weight method, fixed effect model, and panel vector autoregressive (PVAR) model to deeply explore the static and dynamic relationship among financial development, carbon dioxide emissions and sustainable development with the panel data of 30 provinces in China from 2005 to 2021. The research results show that financial development is conducive to forwarding sustainable development, and the negative impact of carbon dioxide emissions on sustainable development is also significant at present. That means financial development and carbon dioxide emissions have important impact on sustainable development. The further empirical results of PVAR model show that there are significant differences in the impact of financial development and carbon dioxide emissions on sustainable development in different periods of time. Therefore, the government should take timely measures according to the different roles played by financial development and carbon dioxide emissions at different stages to promote sustainable development.

Studying how to achieve mutual promotion between financial development and foreign direct investment inflow contributes to the Chinese government’s work of formulating rational financial policy and FDI policy from a holistic point of view and promoting the healthy and ordered growth of the entire economy in China. Based on the provincial panel data from 2007 to 2018, this paper constructs comprehensive evaluation indexes for financial development and introduces functional data analysis (FDA) methods, extracts functional β-convergence from functional linear regression to analyze the two-way time-varying relationship and convergence and divergence between financial development and FDI in the country and the eastern, central, and western regions. The empirical results show that the mutual influence of FDI and financial development presents regional differences. In general, FDI has a promoting effect on financial development, while financial development has an inhibitory effect on FDI, and there is basically no convergence effect. Based on these conclusions, if the governments of various regions in China want to reduce the differences in financial development, promote coordinated financial development, and promote sustainable financial development, they should actively implement financial development policies, optimize the financial environment, and implement differentiated foreign investment policies to promote regional financial development.

Purpose This study aims to assess the nexus among output growth, renewable energy consumption, financial development and environmental quality (EQ) in the presence of non-renewable energy consumption for India using annual time series data for the period 1980–2021. Design/methodology/approach To conduct an econometric analysis, this study uses the augmented autoregressive distributed lag (AARDL) model, which offers the benefit of simultaneously estimating both long-run and short-run estimators. Furthermore, this study uses the Toda-Yamamoto (1995) test and the Breitung and Candelon (2006) test to explore causal relationships in both time and frequency domains (FDs), aiming to understand the dynamic associations between variables. Findings Using the AARDL model, the authors found that initially, with an increase in output growth, EQ deteriorates, but once output growth reaches a threshold level, EQ improves. Likewise, this study found that financial development enhances EQ. Furthermore, the authors found a unidirectional causality from the load capacity factor (LCF) to output growth, renewable energy consumption and non-renewable energy consumption in the case of time domain analysis, and no feedback causality was documented. In the FD causality approach, this study reveals a causality nexus from LCF to output growth, financial development and renewable energy consumption at low, middle and high frequencies. Practical implications The findings highlight the need for targeted policies to balance economic growth and environmental sustainability in India. Policymakers should promote green technologies and enhance renewable energy use to mitigate the initial negative impact of output growth on EQ. The positive role of financial development suggests that encouraging green financing and sustainable investments can further improve environmental outcomes. The Indian economy needs to prioritise sustainable growth in its financial sector by aligning it with ongoing transformative processes for sustainable development. To achieve the sustainable development goals pertaining to EQ, the Indian economy must diminish its reliance on fossil fuels. In addition, the government of India must provide financial assistance to environmental organisations to foster the LCF. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the dynamic nexus among financial development, output growth, renewable energy consumption and EQ proxied by LCF within the Indian context in the presence of non-renewable energy consumption. Likewise, this study uses the LCF to assess environmental sustainability in India, offering a comprehensive evaluation by integrating both supply and demand dimensions. From a policy perspective, this study highlights the significance of fostering sustainable economic growth, implementing environmentally conscious banking policies, and adopting diversified and ecologically friendly strategies. These policy directions are essential for conserving ecological resources and fostering a more sustainable and resilient development trajectory for India.

Purpose The existing literature on the effects of capital mobility and financial development on sustainable trade development in sub-Saharan African (SSA) countries has been centered on production-based carbon emissions without investigating consumption-based or trade-adjusted carbon emissions. The purpose of this paper is to examine the effects of capital mobility and financial development on sustainable trade development, specifically trade-adjusted carbon emissions in SSA economies. Design/methodology/approach The study employed the novel GMM-PVAR estimator and the Drisc-Kraay fixed effect panel corrected standard error (PCSE) dynamic ordinary least squares (DOLS) and the fully modified least squares (FMOLS) approaches on panel data from 46 sub-Saharan African (SSA) countries over the period 1992–2021. Findings The study established that capital mobility has a significant positive effect on sustainable trade development in SSA in the long run. Further, the empirical results reveal that the link between financial development and sustainable trade development is significantly positive in the long run. Moreover, the results suggest that capital mobility and financial development have predictive power on sustainable trade development. Practical implications The findings of the study imply that policymakers ought to pay equal attention to capital mobility and financial development when developing sustainable trade development policies. Originality/value The existing literature has been centered on production-based carbon emissions, without specifically considering sustainable trade development (consumption-based carbon emissions). To the best of our knowledge, this is the first study to examine the effect of capital mobility and financial development on sustainable trade development in SSA countries context.

Financial development and geopolitical risks can significantly affect sustainable development. However, the roles of these factors in sustainable development are rarely investigated. Thus, this study takes into account the role of geopolitical risk while exploring the effects of financial development, natural resource rents, and eco-innovation on sustainable development in the Organization for Economic Co-operation and Development (OECD) countries. To this end, yearly data from 1990 to 2019 is analyzed using advanced econometric tests. The Common Correlated Effects Mean Group (CCEMG) results indicate that financial development and eco-innovation are significantly and positively related to sustainable development. Natural resource rents have a detrimental impact on sustainable development which confirms the presence of the resource curse hypothesis in OECD countries. Furthermore, the results revealed that controlling geopolitical risk is useful in fostering sustainable development. Lastly, the panel Granger causality test unveiled one-way causality from financial development, eco-innovation, natural resource rents, and geopolitical risk to sustainable development. Moreover, causalities are found from geopolitical risk to financial development, eco-innovation and natural resources. These findings suggest that OECD countries should prioritize financial development and eco-innovation policies for sustainable development while mitigating the negative effects of natural resource rents. The geopolitical risk can harm sustainable development, so policymakers should promote international cooperation and risk-sharing.

PurposeThe paper assesses the moderating function of institutions in the financial development and environmental nexus covering India for the time period 1980–2019.Design/methodology/approachDeviating from extant literature which has mostly used emissions of major greenhouse gasses as a measure of environmental quality, the present study uses a broad measure of environmental quality called ecological footprint (EFP). Financial development is measured using a robust proxy recently introduced by International Monetary Fund (IMF). This index is multifaceted and covers three broad dimensions of financial sector in terms of depth, efficiency and access of both financial institutions and markets, thus outperforming the exclusively bank-based measures used in the past literature. Further institutional quality index is generated using the data from international country risk guide. Finally, autoregressive distributed lag model is used for the empirical estimation of short-run and long-run results.FindingsThe empirical estimates reveal that financial development and institutional quality are good for long-run environmental sustainability of India, whereas economic growth degrades the environment in the long- run. The results also attest to the existence of pollution heaven hypothesis in India for long run. Furthermore, regarding the moderating role of institutions, the study reveals that institutional quality complements financial development in affecting environment in the short run. While as, in the long run, they play a substitutive role whereby sound institutions cover-up the inefficiencies in financial system.Research limitations/implicationsFirst, the paper uses the index of financial development developed by the IMF in order to quantify the level of financial development in India overtime. The index is based on three key dimensions of financial development such as the depth, efficiency and access of both financial institutions and markets. However, the index completely neglects the role of financial stability in determining financial development. Thus, future studies that are based on this IMF introduced index of financial development should incorporate the stability dimension to it. Second, this empirical study focused exclusively on India and employed aggregate EFP to measure environmental quality. Further studies can complement the content of this research by conducting similar studies to capture country-specific characteristics of other emerging economies and also scrutinize the impact on the six sub-indices of EFP.Practical implicationsThe results of the study reveal that the effect of financial development, and institutions on ecological footprint is sensitive to time dynamics. Moreover, the findings offer important policy implications to government and policy makers in India on how to curb the menace of environmental degradation.Originality/valueThe paper addresses the gap in the literature by examining the moderating role of institutional quality in the financial development and ecological footprint nexus in India. Furthermore, the authors employ a robust proxy for both financial development and environmental quality unlike extant studies on India.

While financial development is recognized as the driving force of economic growth, income inequality is a significant concern regarding social justice and sustainable development. The relationship between these two concepts can directly affect countries' economic policies and social balances. Therefore, the deepening and expansion of financial systems may create injustice in income distribution, but it also has the potential to reduce inequalities when appropriately managed. This study aims to determine the long-run impact of financial development on income inequality in Türkiye. For this purpose, the data set for the variables covers the period 1991-2022 and consists of annual observations. Income inequality (Gini coefficient) is used as the dependent variable, and the financial development index is used as the independent variable. In the study, the stationarity of the variables was tested with the Fourier unit root test (FKPSS) and KPSS unit root test. After the determination that the variables were not stationary at their level values, the Fourier cointegration test was used to test the existence of a long-run relationship between the variables. The study found that there is a cointegration relationship between financial development and income inequality in Türkiye. After establishing the co-integration relationship, our long-run DOLS estimation revealed a statistically significant negative relationship between financial development and income inequality at a 1% confidence level. The key conclusion drawn from this is that increases in financial development lead to reduced income inequality. This result underscores the potential impact of increasing financial development on reducing income inequality, and the importance of efforts and policies.

PurposeAchieving sustainable development goals (SDGs) demands mobilising finance and aligning it with elements of sustainability. This study, thus, aims to investigate the impact of financial development of an economy on the achievement of SDGs.Design/methodology/approachThe authors analyse a sample of 35 Asian countries based on their SDG trends and representative SDG indicators. An ordered probit model is employed for analysing the impact of financial development on the SDG trend. Subsequently, pairwise Granger causality test is employed for investigating the causality between the SDG and the financial development.FindingsThe findings indicate that financial development positively impacts the progress towards SDG achievement in the areas: (1) gender equality, (2) economic growth, (3) industry, innovation and infrastructure and (4) sustainable cities and communities; and adversely impacts the climate action. The causality test indicates a bidirectional causality for financial development and industry, infrastructure and innovation, financial development and sustainable cities and communities and financial development and climate action, and unidirectional causality from gender equality to financial development.Research limitations/implicationsThe findings have implications for the government of a nation as well as the private businesses. The goals allow businesses to implement well-articulated strategies which pay attention to the SDGs.Originality/valueThe novelty of the paper is that the authors provide evidence supporting the view that focusing on building a resilient and robust financial system is of importance for the achievement of SDGs.

Objective: This research examines the cointegration and causality between inbound tourism, economic growth following Sustainable Development Goals, and financial development in the Western Balkans from 2000 to 2020. The study aims to determine the direction and strength of these relationships to provide insights for policymakers. Theoretical Framework: The study builds upon the theories of financial development and tourism-led growth, as explored by Rasool et al. (2021). It considers the interdependence of tourism, economic growth, and financial development within the broader context of regional economic policies. Method: We employ the Panel Autoregressive Distributed Lag (ARDL) model to identify long-term relationships between the variables. The Dumitrescu and Hurlin test is applied to verify causality among inbound tourism, financial development, and economic growth. Data is sourced from the World Development Indicators provided by the World Bank. Results and Discussion: The analysis confirms a long-term relationship among the three variables, aligning with previous research. The causality analysis indicates strong bidirectional causality between inbound tourism, financial development, and economic growth. These findings highlight the interdependent nature of these factors in the Western Balkans. Research Implications: The study suggests that policymakers in the Western Balkans should promote a well-dispersed and efficient financial development system to stimulate both economic growth and inbound tourism. Effective financial policies can enhance tourism-driven economic expansion. Originality/Value: This research contributes to the literature by applying panel ARDL and causality tests to investigate the relationship between tourism, financial development, and economic growth in the Western Balkans. The study provides new insights into how financial sector efficiency can drive sustainable tourism-led growth in the region.

China’s Belt and Road Initiative (BRI) aims to strengthen regional economic and policy cooperation and achieve the rapid development among the participating countries. While the impact on the financial development of the economic growth and energy environment of BRI participating countries has garnered close attention among scholars, few studies focus on the impact of financial development on the sustainable development goals (SDGs) of the BRI participating countries. To address this gap, we utilized panel regression models to quantitatively assess the impact of China’s financial development scale, structure, and efficiency on the SDGs of the BRI participating countries, and adopted Geographically and Temporally Weighted Regression (GTWR) model to explore the spatial-temporal effects of China’s financial development scale, structure, and efficiency on the SDGs of the BRI participating countries. Our findings indicate that China’s financial development has significantly promoted the SDGs of the BRI participating countries. This study further reveals that the scale and efficiency of China’s financial development have had a more pronounced impact on the SDGs of Asian countries, low- and middle-income countries, and the Land Silk Road participating countries, compared to those of European countries, high-income countries, and the Maritime Silk Road participating countries, respectively. In contrast, the structure of financial development primarily promotes the SDGs of European and high-income BRI participating countries in the land silk belt. The role of China’s financial development in promoting the SDGs of most BRI participating countries has gradually increased over time. This study provides valuable insights for decision-makers in China to facilitate the sustainable development of BRI participating countries and foster a shared community within the BRI framework.

This study aims to investigate the impact of the stock market trade openness and financial development on sustainable development in Kuwait. The study employed quarterly time series for analysis and from 1993-2018, and selected variables are Sustainable development, Stock market, financial development, and trade openness. Sustainable development is treated as a dependent variable, while the others are independent variables. It is concluded that a long run association among the stock market, financial development, trade and sustainable development exists. Autoregressive distributed lagged (ARDL) model is applied for long run and short run estimates. In long run stock market, trade openness and financial development are positive and significant factors of sustainable development, while in the short run, stock market is significant negative contributor to sustainable development. It is therefore recommended that efforts should be made to encourage the investor so that the stock market should grow in future. Similarly, efforts should be made to boost the financial and trade sector should that the country could grow economically, socially and environmentally.

Green investment, financial development, digitalization and economic sustainability in Vietnam: Evidence from a quantile-on-quantile regression and wavelet coherence

Exploring the linkage between financial development and ecological footprint in APEC countries: A novel view under corruption perception and environmental policy stringency