The impact of green finance on high-quality agricultural development: evidence from China

Achieving sustainable economic growth requires not only reducing pollutant emissions but also carbon emissions. Carbon neutral performance, which encapsulates both of these emissions, has become a vital evaluation indicator in attaining sustainable development. This study thus analyzes the role that green technology innovation, green finance, and their synergistic effects play in enhancing carbon neutral performance and achieving sustainable growth based on data from 30 provinces in China from 2010 to 2021. Methodologically, we use the system GMM (SGMM) estimation to minimize the potential exogeneity. Empirical results show significant regional heterogeneity in carbon neutral performance, with higher carbon neutral performance found in South China. Moreover, green finance alone does not play an essential role in carbon neutral performance. In contrast, green technology innovation can contribute to carbon neutral performance, and the synergistic effects of the two can contribute to carbon neutral performance via the capital allocation effect channel and the technology effect channel. Furthermore, the synergistic effects are heterogeneous, in terms of regional variables, the scale of local green finance and the carbon neutral performance levels. Accordingly, the study recommends that China implement policies to promote green financial development and green technological innovation and thereby promote sustainable development.

PurposeThe decarbonization of power generation is key to achieving carbon neutrality in China by the end of 2060. This paper aims to examine how green finance influences China’s low-carbon transition of power generation. Using a provincial panel data set as an empirical study example, green finance is assessed first, then empirically analyses the influences of green finance on the low-carbon transition of power generation, as well as intermediary mechanisms at play. Finally, this paper makes relevant recommendations for peak carbon and carbon neutrality in China.Design/methodology/approachTo begin with, an evaluation index system with five indicators is constructed with entropy weighting method. Second, this paper uses the share of coal-fired power generation that takes in total power generation as an inverse indicator to measure the low-carbon transition in power generation. Finally, the authors perform generalized method of moments (GMM) econometric model to examine how green finance influences China’s low-carbon transition of power generation by taking advantage of 30 provincial panel data sets, spanning the period of 2007–2019. Meanwhile, the implementation of the 2016 Guidance on Green Finance is used as a turning point to address endogeneity using difference-in-difference method (DID).FindingsThe prosperity of green finance can markedly reduce the share of thermal power generation in total electricity generation, which implies a trend toward China’s low-carbon transformation in the power generation industry. Urbanization and R&D investment are driving forces influencing low-carbon transition, while economic development hinders the low-carbon transition. The conclusions remain robust after a series of tests such as the DID method, instrumental variable method and replacement indicators. Notably, the results of the mechanism analysis suggest that green finance contributes to low-carbon transformation in power generation by reducing secondary sectoral share, reducing the production of export products, promoting the advancement of green technologies and expanding the proportion of new installed capacity of renewable energy.Research limitations/implicationsThis paper puts forward relevant suggestions for promoting the green finance development with countermeasures such as allowing low interest rate for renewable energy power generation, facilitating market function and using carbon trade market. Additional policy implication is to promote high quality urbanization and increase R&D investment while pursuing high quality economic development. The last implication is to develop mechanism to strengthen the transformation of industrial structure, to promote high quality trade from high carbon manufactured products to low-carbon products, to stimulate more investment in green technology innovation and to accelerate the greening of installed structure in power generation industry.Originality/valueThis paper first attempts to examine the low-carbon transition in power generation from a new perspective of green finance. Second, this paper analyses the mechanism through several aspects: the share of secondary industry, the output of exported products, advances in green technology and the share of renewable energy in new installed capacity, which has not yet been done. Finally, this study constructs a system of indicators to evaluate green finance, including five indicators with entropy weighting method. In conclusion, this paper provides scientific references for sustainable development in China, and meanwhile for other developing countries with similar characteristics.

Does integration of ESG disclosure and green financing improve firm performance: Practical applications of stakeholders theory.

Green finance has emerged as a prominent topic of discussion as the present generation increasingly recognizes the significance of a sustainable environment. This study employed a local Green Finance Development Index to analyze the substantial impact of green financing on the financial performance of environmentally conscious firms in China. Green finance serves as a fundamental motivator, enhancing the economic insight of environmentally responsible enterprises by strategically consolidating capital and facilitating the continuous interchange of essential information. The study utilizes actual data from 2012 to 2023, concentrating on green listed firms, to examine the relationship relating financial performance and green financing with the GMM estimation Model. This empirical study strengthens the scientific foundation of the green finance paradigm and creates a robust framework for decision-making, fostering the sustainable growth of green industries and enterprises. This empirical study strengthens the systematic foundation of the green finance paradigm and creates a robust framework for decision-making, facilitating the sustainable growth of green industries and enterprises.

PurposeThe need to improve energy efficiency as an essential factor for achieving the Sustainable Development Goals (SDGs) through green financing is one of the most important issues worldwide. It is even more important for ASEAN (Association of Southeast Asian Nations) countries because of their potential for economic growth and the challenge of their environmental problems. This paper therefore addresses the question of whether and how green finance (with the proxy of issued green bonds [GBs]) promotes energy efficiency (with the proxy of energy intensity) in the ASEAN member countries.Design/methodology/approachThe paper runs a two-stage generalized method of moments (GMM) system model for the quarterly data over the period 2017–2020. It also uses a linear interaction model to explore how the pandemic may affect the relationship between green finance and energy efficiency in this region.FindingsThe main results only demonstrate the short-term negative impact of GBs on energy intensity. Furthermore, per capita income, economic integration and renewable energy supply can be used as potential variables to reduce energy intensity, while modernization in ASEAN increases energy intensity. Establishment of digital green finance, long-term planning of a green finance market, trade liberalization and policies to mitigate the negative impacts of COVID-19 are recommended as golden policy implications.Research limitations/implicationsThe present study has several limitations. First, it accounts for explanatory variables by following a number of previous studies. This may lead to omissions or errors. Second, the empirical estimates were conducted for 160 observations due to the repositioning of GBs in ASEAN, which is not bad but not good for an empirical study.Originality/valueTo the best of authors' knowledge, there has not been any in-depth study focusing on the relationship between energy efficiency and green financing for the case of ASEAN economies.

Nexus between green finance, fintech, and high-quality economic development: Empirical evidence from China

Under the new normal, green finance is inevitably linked to high-quality economic development in China. Based on 30 province panel data sets from China from 2010 to 2019, this research employs an innovative spatial econometric model to integrate green finance, environmental pollution and high-quality economic development into a unified empirical analysis framework. Regional green finance and high-quality economic development have spatial spillover effects in China, according to spatial auto-regressive and spatial error model tests, with the eastern region leading, the central region running in parallel and the western region chasing, because of a strong moderating effect in the eastern region. Green finance contributes greatly to high-quality economic development, but increased environmental pollution impedes high-quality economic development. Green financing can help to mitigate the detrimental effects of pollution on high-quality economic development. According to the mechanism of action analysis, green finance reduces pollution by modifying the industrial structure and boosting scientific and technological growth. Finally, the green finance threshold test demonstrates a nonlinear impact on economic quality development after passing a specified threshold value and has a strong threshold characteristic. This research has policy implications since it improves understanding of the dynamics of high-quality economic development as well as the benefits, mechanisms and heterogeneity of green finance in reducing pollution and empowering high-quality economic development.

The role of green finance, environmental benefits, fintech development, and natural resource management in advancing sustainability

Green finance and renewable energy growth in developing nations: A GMM analysis

The significance of democratic commitment is highlighted on a global scale by the importance placed on offering a multitude of chances to establish enduring ecosystems and foster economic progress. Social finance, capital formation, and green finance have recently received a lot of attention from this perspective. Past studies mainly examined social finance and green finance in isolation. When investigating the individual impact of these important variables on economic growth in the occurrence of important events like the COVID-19 pandemic and other environmental pollution issues, most studies have mainly focused on developed countries, ultimately ignoring the different dynamics in emerging economies. The purpose of the research is to investigate the joint interaction between social finance (Social Impact Bonds), capital formation, and green finance (green loans, green investments, and green security) on economic development in BRICS economies. This research employed a longitudinal dataset from 2013 to 2023. The generalized method of moments (GMM) and fixed effect model (FEM) were employed in this research as statistical techniques for estimating parameters. The findings of this study revealed a positive joint relationship between green finance, capital formation, and social financing on economic development of BRICS economies. Therefore, measures that jointly promote social and green finance amidst environmental challenges or economic risks could present opportunities to mitigate the vulnerability of a country's economic prosperity. This research will surely guide policymakers in developing economies on how to give considerable attention to sustainable aspects while formulating policies and strategies aimed at economic development.

Global environmental awareness has increased with the adoption of the sustainable development goals (SDGs) and the Paris Agreement. Global climate change has been a focal point in these international frameworks, with an emphasis on addressing environmental issues and setting specific targets for solutions. Financing plays a vital role in attaining goals established in international frameworks. The limitations of conventional finance have highlighted the need for green finance. There is a scarcity of studies in the literature examining the impact of green finance on carbon emissions, and a definitive conclusion has yet to be reached. This research aims to enhance the current literature by presenting empirical findings on how green finance influences carbon emissions globally. By employing the system generalized method of moments (GMM), developed by Arellano and Bover (1995) and Blundell and Bond (1998), this study investigated how green finance influences carbon emissions. Covering the span of 2017–2022, this study encompassed 48 countries across the globe. Green finance was found to have a negative and statistically significant impact on carbon emissions. Issuing green bonds to represent green finance, when increased by 1%, reduces carbon emissions by −0.012%.

PurposeThis study aims to provide empirical evidence on two research questions: firstly, whether green finance is positively related to electricity access, and, secondly, if the domestic economic environment moderates the relationship between green finance and electricity access? This paper pays particular attention to the regional disparities in Africa.Design/methodology/approachWhile pursuing the study objectives, the authors apply a variety of statistical approaches and tools to assess the robustness of the findings. The authors use panel dataset for analysing data. In order to empirically examine the relationship between green finance and electricity access in the African region, the paper employs static and dynamic panel estimation methods, Poisson method and adopts two-step system generalized method of moments (GMM) approach for dealing with issues relating to endogeneity. The authors also use alternate proxy for the electricity access, which is drawn from the regulatory indicators for sustainable energy (RISE) scores.FindingsThe authors find that despite the fact that green funding appears to support job creation, household incomes aren't high enough to drive rising demand for electricity. The study underscores the role and responsibilities of external funding agencies to ensure that funds at the receiving end are effectively routed to encourage access to clean and sustainable energy, which is good to the economic and domestic environment. Further, due to the relatively modest size of some funds, the cost to administer those funds is larger than the funds themselves. This causes inefficiencies, which may temporarily provide jobs but not lasting growth. This means there is no regular need for energy, therefore larger investors have no reason to enter the market. This discourages investors from public-private partnerships or private investments and prevents future investment.Research limitations/implicationsThe provide insights into the private-public partnerships and whether the challenges to electricity access are being turned into investment opportunities. The effects of the power Africa project initiatives are revealing, with, sanitation being an impediment to the development of electricity infrastructure, specifically in low-income group countries.Practical implicationsThe study confirms the view that trivial amounts of green financing (US-Aid or grants) impose a burden on the absorptive capacity of the recipient government and increases the transaction costs and is likely to be an impediment (Kimura et al., 2012) to initiating projects that enhance electricity access.Social implicationsThe results indicate that although green financing seems to be supporting employment opportunities, income levels are insufficient to create demand for electricity usage. It, therefore, becomes imperative that sanitation (SDG 6) is fully addressed in order to ensure that SDG 7 is attained.Originality/valueThe authors provide insights around the private public partnerships and whether the challenges to electricity access are being turned into investment opportunities. The effects of the power Africa project initiatives are revealing, with, sanitation being an impediment to the development of electricity infrastructure, specifically in low-income group countries.

Green finance, industrial structure upgrading (ISU), and green technology innovation (GTI) are anticipated to diminish carbon intensity and boost sustainable growth. Nevertheless, there are varying perspectives on the effectiveness of green finance in reducing carbon emissions within OECD countries, and the underlying mechanisms remain unclear. Therefore, this study investigates the relationship between green finance and carbon intensity, with a particular focus on the mediating roles of ISU and GTI, using panel data from 31 OECD countries spanning 2003 to 2022. Methodologically, this study employs multiple econometric techniques, including ordinary least squares (OLS), the panel-corrected standard error (PCSE) method, the system generalised method of moments (GMM) model, and the instrumental variable approach. The outcomes reveal that carbon intensity has been diminished by green finance in OECD economies. Furthermore, the impact of green finance on carbon intensity is negatively mediated by ISU. Carbon intensity is not only directly minimised by green finance but also through the mediator of GTI. In addition, the effects of green finance on lowering carbon intensity are particularly pronounced in low-income and high-carbon countries. Lastly, this study provides policy recommendations aimed at enhancing carbon reduction efforts in OECD and developing economies.

This paper examines the effectiveness of artificial intelligence (AI) adoption and green finance, as well as their impact on the financial performance of firms in the green finance sector in Pakistan over the period 2014-2023. As more people become globally aware of sustainability and the environment, green finance, facilitated by AI, can transform the process of making financial decisions to build investment portfolios. The study examined the impact of AI-driven methods in green finance (i.e., green bond issuance, Regularity strength, ESG incorporation, and carbon footprint reduction) on financial performance metrics. Financial performance is measured by Return on Assets (ROA). Based on the information collected with the assistance of financial institutions in Pakistan, the researcher employed the Generalized Method of Moments (GMM) estimation approach to address potential endogeneity problems. The results suggest that the adoption of AI, strength of regulation, the issuance of green bonds, and ESG scores has a positive and significant effects on financial performance, and the strength of regulatory presence enhances the positive effect of AI. These findings suggest a greater relevance of AI in enhancing the financial performance of institutions that adhere to the principles of sustainable finance, as well as in achieving the overall objective of environmental sustainability. The study has important implications for policymakers, investment companies, and financial institutions that seek to incorporate AI technology into their green finance plans to develop more effective financial and environmental solutions.

Green finance and renewable energy in Africa: Does inclusive finance play any role?