Green Investment Research Articles

How do governance indicators, trade openness, industrialization, and population growth affect environmental degradation in BRICS Nations?

Against the backdrop of the dismal performance of BRICS nations in terms of governance, this study examines the relationship between governance indicators and carbon emissions. By employing DOLS and FMOLS cointegration techniques from 1996 to 2022, we find that effective governance helps in reducing environmental pollution. Specifically, indicators namely government effectiveness, political stability, the rule of law, voice and accountability, regulatory quality, and control of corruption show a favourable impact in mitigating carbon emissions. Additionally, our findings reveal that both foreign direct investments and trade openness contribute positively in lowering carbon emissions by introducing advanced technologies and sustainable practices. Conversely, rapid industrialization and population growth exacerbate carbon emissions due to increased reliance on fossil fuels and higher energy demand. Our study underscores the need for enhanced governance, green investments, and stringent environmental regulations to balance economic growth with environmental sustainability in BRICS nations.

Does outsourcing enhance consumer services and profitability of a dual-channel retailing?

In the era of digital commerce, the concept of dual-channel retailing has attracted increased attention. Dual-channel retailing increases the importance of outsourcing for an imperfect production process to enhance customer satisfaction. This study explores a sustainable dual-channel retailing strategies for an imperfect production process under a flexible production system. The manufacturer runs a production process prone to defects utilizes both offline and online channels for product sales. The manufacturer contemplates green investments to enhance the production efficiency and reduce waste and carbon emissions, alongside the possibility of outsourcing a portion of production to a partner. A mathematical model is developed to accounts for these factors and analyzes the optimal allocation of products between channels, pricing strategies, production rates, and investments amount to reduce carbon emissions. The model incorporates demand sensitiveness to green practices and channel's selling price. Results of this research are directed towards offering significant perspectives for organizations that aspire to attain a harmonious equilibrium among financial profitability, ecological sustainability, and addressing deficiencies in their manufacturing procedures in a dual-channel retail setting through subcontracting. Numerical illustrations exhibit that partial outsourcing enhances system's profit by 2.03%, whereas investments to reduce carbon emissions enhance the profit by 4.95%. Flexibility in the production process helps to increase the profit by 13.50%, and channel coordination helps to enhance the profit by 38.54%.

Research on the Mechanisms by Which Green Finance Policies Promote Low-Carbon Economic Development

This paper explores the mechanisms by which green finance policies promote low-carbon economic development, analyzing their implementation effects and challenges in China, and proposing corresponding policy recommendations. Green finance, defined as financial activities supporting environmental protection and sustainable development, aims to direct funds towards environmentally friendly and low-carbon projects. It includes green credit, green bonds, green investment funds, and green insurance, and involves providing preferential loans, issuing green bonds, establishing investment funds, and developing insurance products to support green projects and reduce environmental risks. Additional policies such as green incentives, environmental information disclosure, green ratings, and international cooperation further enhance the effectiveness of green finance. The mechanisms by which green finance policies promote low-carbon development include guiding funds to low-carbon industries, optimizing resource allocation, promoting technological innovation, supporting industrial structure transformation, enhancing market competitiveness, and promoting socially responsible investment. Despite significant progress, challenges such as insufficient supply of green finance resources, regional disparities in policy implementation, limited innovation in green finance products, and imperfect information disclosure and regulatory systems remain. The paper concludes with policy recommendations to increase policy support, improve information disclosure and regulatory systems, promote product innovation, strengthen regional coordinated development, and enhance international cooperation.

Exploring interconnections and risk evaluation of green equities and bonds: fresh perspectives from TVP-VAR model and wavelet-based VaR analysis

PurposeThis study attempts to examine the time-varying volatility spillovers between environmentally sustainable assets and quantify the value-at-risk of the portfolios across various frequencies.Design/methodology/approachTo accomplish these objectives, this paper utilizes a connectedness index-based TVP-VAR model and applies the wavelet-based VaR ratio to daily data spanning from January 2018 to September 2023.FindingsThe empirical findings reveal a notable increase in the connectedness index between green stocks and green bonds during the COVID-19 crisis, signifying evidence of a contagion effect. The portfolio’s risk ratio also exhibited a sharp rise amid the pandemic, particularly over medium and long-term horizons, driven by increased spillover among green assets. Notably, our analysis indicates that green bonds influence the connectedness system between green stocks and the value-at-risk ratio, reducing volatility spillover and portfolio risk ratios across various investment horizons. These results highlight the role of green bonds as an effective diversification asset against the risks associated with green equities.Originality/valueThis research investigates the dynamic connectedness and value-at-risk ratio between eight green sectoral renewable energy and non-energy equities and green bonds. We put forward some portfolio implications for green investors with an environmental consciousness who desire to decarbonize their portfolios and mitigate environmental issues.

Is green optimism good for the environment but bad for firms?—A study on green optimism in a supply chain

With a growing number of consumers expressing their preferences for environment-friendly products, it has become a critical agenda for businesses to address environment and sustainability issues. However, there exists a discrepancy between consumers’ stated preferences and their actual purchasing behaviors. Accordingly, firms may overestimate market demand from environmentally conscious consumers, leading to ‘green optimism’ bias. We develop a stylized model to investigate how a manufacturer’s green optimism influences firms’ green investments and subsequent profits in a supply chain comprising a manufacturer and a retailer, both of whom can invest in greening. We consider two scenarios based on the leadership in the supply chain: retailer-led and manufacturer-led. Conventional wisdom suggests that optimism regarding the environmental demand could motivate firms to increase green investment but may harm profits due to biased decisions. Surprisingly, however, our analysis reveals that within a supply chain context, manufacturer’s green optimism may discourage green investment of the optimistic manufacturer and also the retailer. Moreover, green optimism bias may increase the profit of the optimistic manufacturer and lead to a win–win situation in a supply chain. We characterize the conditions under which such counter-intuitive results occur and explain the underlying mechanisms. In doing so, we also identify two distinct roles played by a retailer, ‘bias-reducing’ and ‘bias-intensifying’, depending on the supply chain leadership.

Quantitative Easing and Climate Change: A Case Study

In the context of increasing global climate change, this article takes an in-depth look at how central banks can use quantitative easing to help address this issue. Based on three research methods: Green Bond, SDGs Bond, Carbon Trading Market and Carbon Reduction Project, this paper analyzes the pros and cons of specific measures of quantitative easing in dealing with climate change. The study found that the above three types of quantitative easing policies can effectively guide funds to green industries, promote green economy and sustainable development, and thus mitigate the economic impact of climate change. This research not only provides a new perspective for central bank policy making, but also provides investors with new opportunities for green investment. This paper suggests that the central bank should increase its support for green projects when formulating quantitative easing policies, and encourage investors to actively participate in green investment to jointly promote the response to climate change.

Blockchain and sustainable finance: Enhancing transparency and efficiency in green investments

The study aimed to analyse the possibilities of using blockchain technology to increase transparency and efficiency in sustainable finance. The application of blockchain technologies and environmental and social practices in the context of sustainable finance was analysed, emphasising implementation and prospects in Kyrgyzstan. Blockchain, as an innovative decentralised data recording technology, provides a high level of security, transparency and immutability, which renders it particularly valuable for the financial sector. The study highlighted how blockchain can improve international transfer processes, increase the transparency of financial transactions and simplify the management of smart contracts, and noted existing challenges such as scalability and legal issues. The role of blockchain technologies in sustainable finance, especially in the field of green investments, was highlighted as an important aspect of the study. The introduction of blockchain in areas such as green project financing and social initiative management can help increase investor confidence and improve investment performance. Financial technology is also central in shaping new approaches to finance and investment, facilitating access to capital through crowdfunding and person-to-person (P2P) lending platforms. The introduction of environmental and social practices in financial institutions of the Kyrgyz Republic demonstrates the growing attention to corporate responsibility and sustainable development, despite the initial stage of their implementation. On international stage, successful projects such as the use of blockchain to track supply chains, green bonds and carbon credit management demonstrate the potential of technology to improve the transparency and efficiency of sustainable finance. These examples can be used by Kyrgyzstan in developing and implementing domestic blockchain and environmental and social initiatives, contributing to more sustainable economic growth and attracting international investment

CEO hubris and corporate carbon footprint: The role of gender diversity

AbstractThis paper investigates the effect of an overconfident CEO on firm greenhouse gas emissions. Using panel data of 160,115 firm‐year observations from 41 countries for 2000–2021, we find a negative relationship between CEO overconfidence and greenhouse gas emissions. Additionally, drawing on the theories of gender socialisation and diversity, we find that great representation of females on the board further compels overconfident CEOs to reduce firm carbon emissions. Our findings are robust to varying estimation techniques and identification strategies. These findings offer important insights to green investors, corporate boards, managers and policymakers on the role of overconfident CEOs and female leadership in the carbon abatement efforts of public companies.

Global-local nexus in sustainable development: the influence of international green investment on local environmental spending

Strengthening the financial capabilities of local governments is essential for achieving the Sustainable Development Goals. Previous research has primarily focused on the flows of finance across countries and regions, neglecting the interaction between international investment and local fiscal response. To address this gap, this study first developed the typology of local environmental spending, and then linked it to a panel dataset composed of 4,439 CDM projects in China and expenditure at the provincial level from 2005 to 2017 to explore the role of international green finance. By categorizing local environmental spending into capital spending and recurrent spending, the findings reveal that international green investment primarily influences the former type, with regional and project type variations. With explanation and discussions of the results, this study contributes to sustainability research by investigating the global-local nexus through a fiscal lens and provides policy insights for local capacity building and global financial system design.

Under the Goal of Sustainable Development, Do Regions with Higher Energy Intensity Generate More Green Innovation? Evidence from Chinese Cities

Sustainable development is a global focal point. This study aims to analyze the relationship between energy intensity and green innovation using panel data from 285 Chinese cities spanning from 2003 to 2019. The novel element of this research is the first-time exploration of green innovation through the lens of local industry attributes. It explains the impact of energy intensity on the development of green innovation. By employing a two-way fixed-effect model, the regression analysis reveals that higher energy intensity in cities negatively influences green innovation. Robustness and mechanism tests indicate that in regions with higher energy intensity, governments issue more policies to encourage enterprises and research institutions to pursue green innovation. However, these regions have developed significant path dependence, and local enterprises are reluctant to increase green investment even when facing stringent regulations. Heterogeneity analysis proves that cities with higher levels of digitalization, R&D investment, urbanization, and per capita GDP exhibit an increase in green innovation. The research and findings of this study are of significant importance for policy and strategy formulation, allowing governments and enterprises to develop targeted economic strategies to improve energy efficiency and promote green innovation, thereby achieving sustainable development goals. Potential limitations include data quality, and some key information is difficult to obtain from public sources due to confidentiality, which may result in limitations and biases in the results.

Do bitcoin electricity consumption and carbon footprint exhibit random walk and bubbles? Analysis with policy implications

One of the main current focuses of global economies and decision-makers is the efficiency of energy utilization in cryptocurrency mining and trading, along with the reduction of associated carbon emissions. Understanding the pattern of Bitcoin's energy consumption and its bubble frequency can greatly enhance policy analysis and decision-making for energy efficiency and carbon emission reduction. This research aims to assess the validity of the random walk hypothesis for Bitcoin's electricity consumption and carbon footprint. We employed both traditional methods (ADF and KPSS) and recently proposed unit root techniques that account for structural breaks and non-linearity in the data series. Our analysis covers daily data from July 2010 to December 2021. The empirical results revealed that traditional unit root techniques did not confirm the stationarity of both bitcoin's electricity consumption and carbon footprint. However, novel structural break (SB) and linearity tests conducted enabled us to discover five SB episodes between 2012 and 2020 and non-linearity of the variables, which informed our application of the newly developed non-linear unit root tests with structural breaks. With the new methods, the results indicated stationarity after accommodating the SB and non-linearity. Furthermore, based on Phillips and Shi (2019)'s test, we identified certain bubble episodes in the bitcoin energy and carbon variables between 2013 and 2021. The major drivers of the bubbles in bitcoin energy consumption and carbon footprint are variables relating to the bitcoin and financial markets activities and risks, including the global economic and political risks. The study's conclusion based on the above findings informs several policy implications drawn for energy and environmental management including the encouragement of green investments in cryptocurrency mining and trading.

Green Economics in Global Perspective based on Bibliometric Review

This study presents a comprehensive bibliometric analysis of green economics literature from 1967 to 2024, highlighting thematic clusters, research trends, potential research topics, and author collaborations. The analysis identifies key themes such as green innovation, energy, economic activities, green investment, and policy frameworks, emphasizing the multifaceted nature of the field. Temporal trends reveal a progression from foundational economic activities to a focus on green innovation and integrated policy initiatives. Potential research areas include financial instruments like green bonds, regulatory frameworks, and the economic benefits of sustainable practices. The author collaboration network shows significant cooperative efforts, with tightly-knit clusters of researchers driving advancements in green economics. This interdisciplinary and collaborative nature suggests that future research will benefit from continued partnerships and integrated approaches to sustainability.

The Impact of Financial Stress and Uncertainty on Green and Conventional Bonds and Stocks: A Nonlinear and Nonparametric Quantile Analysis

This study aims to investigate the impact of financial stress and uncertainty on the returns of green and conventional bonds and stocks in the United States from 2010 to 2022. The research utilizes nonlinear and nonparametric analysis, which includes the quantile-on-quantile and nonparametric causality-in-quantiles approaches to examine the relationship between variables. The data analyzed using R programming language show that financial stress positively impacts the middle quantiles of both conventional and green equity, while financial uncertainty negatively impacts upper quantiles. The study also finds that financial stress has a more significant impact on all types of bonds compared to financial uncertainty, with conventional bonds being more affected. This study proposes a pyramid that classifies financial assets based on their susceptibility to financial stress, which could help investors evaluate risk levels and make better investment decisions. The study recommends that policymakers should encourage green investments by offering incentives, such as tax credits. They should also focus on enhancing the efficiency of volatile assets by implementing new investment rules and regulations.

EFFECT OF GREEN INVESTMENT, GOVERNMENT POLICY, AND RESOURCE MANAGEMENT ON THE FINANCIAL PERFORMANCE OF START-UPS IN CENTRAL JAWA

Indonesia, has become a hub for such start-ups, aiming for both financial success and environmental consciousness. Green investments, which fund projects with environmental benefits, play a crucial role. These investments range from adopting energy-efficient technologies to implementing sustainable supply chains, leading to long-term cost savings and improved corporate reputation. Government policy is also vital, as supportive policies in Central Java include monetary rewards, tax breaks, and assistance programs that encourage start-ups to adopt sustainable practices. Effective resource management, which optimizes the use of human, financial, and material resources, is crucial for start-ups facing limited resources and intense competition. Efficient resource management can significantly impact a start-up’s operational efficiency and financial outcomes. This study examines how green investments, government policy, and resource management collectively influence the financial success of start-ups in Central Java. Data was collected from 40 start-ups across various industries using a quantitative approach, and multiple regression analysis was performed. The results show that higher financial performance is primarily due to green investments, supportive government policies, and efficient resource management, with a positive interaction between these factors leading to significant gains. The study provides factual proof that effective resource management, sustainable practices, and compliance with government regulations are essential for successful start-up operations. It highlights the complementary effects of these elements, suggesting that a comprehensive corporate strategy enhances financial results. This study offers insights for start-ups to enhance sustainability and performance and provides recommendations for policymakers to create a supportive entrepreneurial environment.

The Effect of Green Bonds on Natural Capital Protection: Worldwide Evidence

The continued destruction of nature, including the degradation of natural capital and biodiversity, threatens ecosystem services and human well-being. Natural capital is crucial for providing the conditions necessary for human survival and ecosystem services. Without protecting natural capital, this degradation will have lasting effects on current and future generations. Existing studies increasingly show that Green Bonds can finance environmental projects effectively, but few have examined their impact on natural capital protection. This study investigates the effect of Green Bonds on natural capital protection globally, using IMF Climate Data and World Bank data from 2019 to 2022. By applying the Green Investment theory and quantile-panel regression analysis, the results show that Green Bonds significantly enhance natural capital protection at the 25th and 50th percentiles. This indicates that countries can improve their natural capital protection through the issuance of Green Bonds. Moreover, the study finds that renewable energy positively correlates with natural capital protection, while population growth and total natural resource rents have negative impacts. Hence, this study recommends that governments prioritize the issuance of Green Bonds to fund environmental initiatives.

Exploring the role of green investment, energy intensity and economic complexity in balancing the relationship between growth and environmental degradation

Exploring the role of green investment, energy intensity and economic complexity in balancing the relationship between growth and environmental degradation

Green practices and economic performance: Mediating role of green innovation in Ethiopian leather, textile, and garment industries—An integrated PLS-SEM analysis

Incorporating green issues into business operations is indisputable, as this is mandatory in today's environmental era. The purpose of this study was to explore the structural link between green practices such as green manufacturing, green marketing orientation, green human resource management, green investment, and the economic performance of textile and leather firms in Ethiopia through green innovation. This study was carried out utilizing a quantitative method, and 201 surveys were used to gather the data from the top managers and general managers of medium and large textile and leather firms in Ethiopia using stratified random sampling. To test the hypothesis, partial least squares structural equation modeling (PLS-SEM) was used. The results of this study demonstrate that green practices, specifically green manufacturing practices (GMP), green marketing orientation (GMO), and green investment (GIV), have a positive and substantial contribution to firms' economic performance (EP) and green innovation (GIN). However, the advancement of GIN is not significantly affected by the adoption of sustainable human resources management (HRM). Moreover, green innovation facilitates the connection between economic success, GIV, and GMO. Nonetheless, when it comes to the relationship between GHRM, green manufacturing practices, and economic success, green innovation plays no mediating function. According to this research, a company's management ought to strengthen its green practices as lower expenses would boost its economic outcome.

Fintech's impact on conventional and Islamic sustainable equities: Short- and long-term contributions of the digital financial ecosystem

This study investigates the integration of cutting-edge financial technologies, such as distributed ledger diversity, next-generation payment trackers, democratized banking, and cryptocurrency, and their impact on global sustainability and ethical ratings in Islamic markets. Our analysis spans the period from May 31, 2018, to May 10, 2023, and uses a novel analytical framework based on quantile time–frequency connectedness and causality analysis. Results showed that democratized banking, future payment opportunities, and sustainability-screened markets had stronger associations than distributed ledger technologies and crypto-based tokenization. Second, Islamic sustainable markets have slightly closer ties to the digital financial ecosystem than traditional responsible investments. Third, causality analysis revealed bidirectional relationships between sustainable markets and democratized banking and potential payment opportunities in the short to mid-term. Fourth, in the short term, there was unidirectional causality from conscious markets to investments in digitized currencies and blockchains; however, no long-term causality between the digital financial ecosystem and sustainability investments. Fifth, the diversity of distributed ledgers had a limited relationship with green investments, whereas advanced transaction monitoring platforms and inclusive financial infrastructure could serve as catalysts for nature-based portfolios. These findings inform policymakers in green finance and provide insights for digital financial network strategists, investors, and regulators, enabling sustainable interdisciplinary investment practices. This comprehensive examination sheds light on the evolving landscape of sustainable finance in the context of rapidly advancing financial technologies, paving the way for informed decision-making and strategic planning in the field of green investments.

The Importance of Green Investments in Developed Economies—MCDM Models for Achieving Adequate Green Investments

Green investments help to create less harmful alternatives and adequate funds that contribute to economic growth, sustainable development, and social well-being. The paper aims to evaluate decision making on the choice of green investments based on multi-criteria decision making (MCDM). The applied methods are empirical and analytical based on the study of the literature, multi-criteria modeling, the determination of weights, and the ranking of criteria in deciding the green investment mapping of indicators, and mapping the indicators. The research used groups of indicators that reflect the main characteristics of green growth from the OECD database. The idea is to decide on the best green investment based on green growth criteria, which consist of grouped indicators according to the areas of the green economy rather than according to their values. The results of the Analytical Hierarchy Process (AHP method) showed that half of the investments in the green economy come from public sources (0.51) and the other half are private (0.25) and institutional investors (0.24), while the Best/Worst Method (BWM) revealed that the best criterion for the decision to invest in the green economy is the environmental and resource productivity of the economy, and the worst is the base of natural assets. This paper aims to enable decision-makers to use these results as weights for the overall assessment of green investments in ESG and to simplify the decision-making approach in future analyses.

Management myopia and green investment: Evidence from China

AbstractThis paper examines the impact of management myopia on the investment behavior of green investors using A‐share listed companies from 2004 to 2020 in China. The research reveals that management myopia significantly inhibits the investment behavior of green investors. Through corporate reputation and the development of green technologies, management myopia affects the investment intentions of green investors. Environmental project subsidies do not mitigate the negative impact of management myopia on green investment intentions. Interestingly, compared to environmentally friendly projects categorized under “profit‐related” and “reward” headings, subsidies in the form of environmental project grants exacerbate the inhibitory effect of management myopia on green investment.