Abstract
The study aims to analyze the contributions of green innovation, green energy production, and financial development to environmental quality with the moderating role of country governance. The study collects data from a panel of five South Asian economies from 2000 to 2018. The paper includes CIPS, a second-generation unit root to test the data's stationarity, and the Westerlund co-integration to investigate the long-term relationship between determinants. The Fully Modified and Dynamic Ordinary Least Square is applied to estimate the long-run coefficient and test the hypothesized relationship between selected determinants. The study finds that green innovation and green energy production negatively (positively) contribute to environmental degradation (environment sustainability). Moreover, financial development has a substantial impact on environmental degradation and sustainability, as per the findings. The study further finds a significant role of country governance in the relationship between green innovation, green energy production, environmental degradation, and environmental sustainability. Furthermore, country governance is improving the link between financial development and environmental degradation, and long-term sustainability.
Highlights
Due to the tremendous growth in carbon emissions over the last few decades, the globe has faced a severe problem of global warming
CIPS results are shown in Table 3, which reveals that none of the predicted variables is stationary at the level
The current study examined the effects of green innovation (GIN), Green energy production (GEP), and financial development (FD) on Environment degradation (ED) and Environment sustainability (ES)
Summary
Due to the tremendous growth in carbon emissions over the last few decades, the globe has faced a severe problem of global warming. This increase deteriorates environmental quality (EQ) of both developed and developing economies’ (Khan et al, 2020). Many researchers have conducted studies to reduce environmental degradation (ED) and increase environmental sustainability (ES), but their findings remain inconclusive as a practical knowledge gap exists. Researchers assume that reducing carbon emissions improves the ES (Ahmed et al, 2021) This assumption is not applicable practically, as environmental sustainability and degradation are two different dimensions of Environmental Quality (Ahmed et al, 2021). The present study investigates the contributions of different factors
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