Asymmetric Green Bonds‐Energy Efficiency Nexus in European Union Countries: Evidence from Econometric Estimation

Abstract

Green financing has a direct or indirect link with energy efficiency and environmental‐based sustainable development goals. The present study explores the nonlinear green bonds‐energy efficiency association in the topmost ten green bonds issuing nations of the European Union (Germany, Italy, France, Sweden, Spain, Netherlands, Norway, Denmark, Belgium, and Finland). Previous research utilizes panel data econometric techniques, yielding typical results about the linkage among green bonds and energy efficiency, despite the reality that numerous nations do not observe such linkage individually. This research, conversely, adopts an unusual approach known as “quantile‐on‐quantile,” which permits researchers to observe dependence of time‐series in every single nation exclusively to give global yet country‐related expertise regarding the connection among the variables. According to estimations, green‐bond financing enhances energy efficiency in the majority of the chosen countries at many quantiles of the variables. Additionally, the data reveal that the extent of asymmetry among variables differs by nation, underlining the necessity of governments giving keen attention while adopting green financing and energy efficiency programs.