How Economic Performance of OECD economies influences through Green Finance and Renewable Energy Investment Resources?

Abstract

Recently, the economic and environmental performance has become a global requirement, and green finance and renewable energy have been considered the foremost solutions for researchers’ attention. Thus, the current study examines the potential relationship between the variables of green finance, investment in renewable energy projects, economic performance, and the environmental performance of OECD countries. The study has used secondary data downloaded from world-renowned reliable resources like the World Bank websites, the OECD data sets from the official website of the countries, and IRENA. The researcher has used structural equation modeling in this study, unlike previous empirical research trends. The analysis has revealed that green finance and investment in renewable energy sectors are responsible for economic growth. To be more precise, the results can be summarized to explain that in the OECD region Green Finance and investments in the renewable energy sector are responsible for generating positive economic outputs in terms of an increase in trade openness, attraction of FDI, and GDP. Furthermore, it is also shown that reducing greenhouse gas emissions and carbon dioxide production and emission can lead to better environmental performance. The environmental performance is also a positive moderator between the relations of green finance with the economic performance and renewable energy investments and economic output in the OECD countries. The outcomes of the current study will be helpful for the policy makers and practitioners in OECD countries and other similar regions in the world in terms of proper planning of their investments aimed toward achieving sustainable economic growth and environmental sustainability.