The study of the relationship between green finance and resource efficiency in east asian economies

Abstract

This empirical study, spanning 2000 to 2022 in East Asian economies, employs the Continuously-Updated and Fully Modified approach to explore determinants of fossil fuel utilization efficiency. Findings reveal a positive link between a 1% increase in green finance and a 0.16% enhancement in fossil fuel efficiency, reducing intensity. Conversely, increased inward foreign direct investment (FDI) correlates with reduced efficiency and heightened fossil fuel intensity, emphasizing the need for eco-friendly FDI strategies. A positive connection is identified between a 1% rise in green energy deployment and a 0.26% improvement in fossil fuel efficiency. However, an elevated employment ratio is associated with lower efficiency and higher fossil fuel intensity. To foster a sustainable and energy-efficient future, recommended policies include prioritizing green finance, digitalizing the green financial sector, implementing green FDI reforms, creating green job positions, and enhancing societal awareness in East Asian economies.