The role of green finance in mitigating environmental degradation: Empirical evidence and policy implications from complex economies

Numan, Umar; Ma, Benjiang; Sadiq, Muhammad; Bedru, Hayat Dino; Jiang, Can

doi:10.1016/j.jclepro.2023.136693

Cited by 58 publications

(28 citation statements)

References 56 publications

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“…In order to eliminate heteroscedasticity, cross-section correlation, and autocorrelation in the panel data, a fixed effects model with Driscoll-Kraay standard errors is used to assess the influence of DFI on AGTFP. The Driscoll-Kraay standard errors are "heteroskedasticity-and autocorrelation-consistent and are robust to general forms of cross-sectional and temporal dependence" [90,91].…”

Section: Baseline Regressionmentioning

confidence: 89%

Digital Financial Inclusion, Land Transfer, and Agricultural Green Total Factor Productivity

2023

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Improving agricultural green total factor productivity is important for achieving high-quality economic development and the SDGs. Digital inclusive finance, which combines the advantages of digital technology and inclusive finance, represents a new scheme that can ease credit constraints and information ambiguity in agricultural production. First, this study focused on agro-ecological functions; we incorporated total agricultural carbon sequestration and emissions extraction into the evaluation system and used the mixed-direction-distance function to calculate agricultural green total factor productivity. Then, based on panel data from 31 provinces in China collected from 2011 to 2021, we used the two-way fixed effect model, the interactive fixed effect, and the plausibly exogenous variable method to test the impact of digital financial inclusion on agricultural green total factor productivity, and its mechanism of action. The panel-corrected standard error and fixed effect Driscoll–Kraay methods were used to account for the unobserved heterogeneity and cross-section dependence in the panel data. The results showed that digital financial inclusion can significantly improve agricultural green total factor productivity. This conclusion remained valid following robustness tests using the spatial econometric model and the method of changing explanatory variables. Digital financial inclusion can improve agricultural green total factor productivity by facilitating the transfer of agricultural land. Sound digital infrastructure and strict green credit policies enhance the role of digital inclusive finance in promoting the green development of agriculture. These conclusions could help the financial sector to formulate flexible, accurate, reasonable, and appropriate financial policies and products that would support agriculture, and enhance the role of digital inclusive finance in promoting sustainable agricultural development.

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Section: Baseline Regressionmentioning

confidence: 89%

Digital Financial Inclusion, Land Transfer, and Agricultural Green Total Factor Productivity

2023

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“…Understanding the drivers of environmental degradation is one of the most debated issues. Several scholars have highlighted the determinants of environmental degradation by focusing on economic growth (Muhammad et al, 2021; Ozcan et al, 2020), urbanization (Awan et al, 2022; Cetin et al, 2018; Yasin et al, 2021), financial development (Ahmad et al, 2022; Çetin et al, 2022; Cetin & Ecevit, 2017), energy consumption (Ali et al, 2023; Depren et al, 2022), tourism (Balsalobre‐Lorente et al, 2020; Çetin et al, 2021), industrialization (Liu et al, 2022), income inequality (Ozturk et al, 2022), agriculture (Çetin et al, 2020), Technological innovation and green finance (Numan et al, 2023). Since the seminal work of Can and Gozgor (2017), economists started focusing on the nexus between economic complexity and environmental degradation.…”

Section: Review Of Literaturementioning

confidence: 99%

“…Adebayo et al (2022), using several estimation techniques robust to heterogeneity and cross‐sectional dependence, show that economic complexity and non‐renewable energy increase CO 2 emissions, while renewable energy improves environmental quality. Likewise, Numan et al (2023) carried out an investigation to determine the effect of economic complexity on environmental degradation in 13 complex economic countries over the period 2006–2020. The results reveal that economic complexity upsurges the ecological footprint by 0.75%.…”

Section: Review Of Literaturementioning

confidence: 99%

How does economic complexity influence environmental degradation? New insights from African countries

Ntang,

Baida,

Abba Yadou

2023

Natural Resources Forum

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This paper seeks to investigate the effect of economic complexity on environmental degradation in 20 selected African countries over the period 1991–2014. The Feasible Generalized Least Square (FGLS), and Driscoll‐Kraay estimators (DK) are used to capture the objectives of the study. The results suggest that economic complexity and economic growth enhance environmental degradation. Also, natural resources rents and globalization improve environmental quality. Furthermore, the findings reject the U‐shaped relationship between economic complexity and environmental degradation. In addition, the Dumitrescu‐Hurlin panel causality test shows a bidirectional causal relation between economic complexity and environmental degradation. Taking into account the ecological deficit or ecological reserve status of country, it is shown that while the natural resource rents reduce environmental degradation in ecological reserve countries, they increase environmental degradation in ecological deficit countries. The results are robust when an alternative measure of economic complexity is used. Based on these findings, the paper suggests that the governments of African countries should take into account economic complexity when designing their environmental protection policies.

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“…Scientific research on green finance may integrate such subjects as economics, finance, the environment, chemical industry, law, information, architecture, engineering, culture, and nuclear energy, which require highly practical and skill-based knowledge. Among the most recent representative papers, we found the following: An outlook on the development of renewable energy , policy measures to reshape the current energy mix , and how to achieve sustainable economic growth in the post COVID-19 era (2022) [ 42 ]; The role of green finance in mitigating environmental degradation : Empirical evidence and policy implications from complex economies (2023) [ 43 ]; How do green energy investment , economic policy uncertainty , and natural resources affect greenhouse gas emissions ? A Markov-switching equilibrium approach (2022) [ 44 ]; and How energy transition and environmental innovation ensure environmental sustainability ?…”

Section: Literature Review and Analysis Frameworkmentioning

confidence: 99%

Influence analysis and promotion countermeasures of green finance policy in China—Traceability based on grounded theory and validation using the csQCA method

Kong

Zhang

et al. 2023

PLoS ONE

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Green finance is closely related to sustainable energy development. Using the NVivo12plus software, a governance model of China’s green finance policy was constructed using 22 green finance policy texts at the central level as research objects. Furthermore, based on the csQCA method, Tosmana software was used to develop and verify a theoretical model of 19 policy text cases. The research results demonstrate that policy belief, policy objectives, policy tools, policy feedback, and policy cycle are the main components of China’s green finance policy governance. Furthermore, policy instruments are the fundamental factors affecting the governance effectiveness of China’s green finance policy. Policy goals and policy feedback dominate the influence pattern of green finance policy in China. There are three modes driving the influence of green finance policies: regulation-oriented, collaborative-driven, and tool-guided. Finally, for the optimization and improvement of green finance policies, three forces must be improved: stimulus force, driving force, and promotion force.

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The role of green finance in mitigating environmental degradation: Empirical evidence and policy implications from complex economies

Cited by 58 publications

References 56 publications

Digital Financial Inclusion, Land Transfer, and Agricultural Green Total Factor Productivity

Digital Financial Inclusion, Land Transfer, and Agricultural Green Total Factor Productivity

How does economic complexity influence environmental degradation? New insights from African countries

Influence analysis and promotion countermeasures of green finance policy in China—Traceability based on grounded theory and validation using the csQCA method

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