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Nexus among financial development and equity market on green economic finance: Fresh insights from European Union

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  • Yin, Qingwei

Abstract

The EU has led efforts to promote green economic financing, crucial to achieving sustainable development objectives and transitioning to a greener economy. This paper explores the link between financial development, the stock market, and green economic financing in the EU from 2000 to 2020. We reveal the relationship between these factors using panel quantile regression analysis. The paper examines how financial development and equity markets promote green economic financing, which helps achieve sustainable development objectives and solve environmental issues. Financial development and stock market effects on green economic financing vary among quantiles. Financial development has a favorable and considerable influence on green economic financing, suggesting that a well-developed financial system may promote sustainable and environmentally friendly investments. The equity market is also linked with green economic financing, implying that a healthy stock market may increase green project funding. We also find threshold effects, demonstrating that financial development and stock markets affect green economic financing unevenly. At higher quantiles, financial development and stock market advantages on green economic finance are more significant for nations with more significant green investment.These results affect EU officials and investors. Policymakers may promote a greener economy by permitting sustainable investments.

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  • Yin, Qingwei, 2023. "Nexus among financial development and equity market on green economic finance: Fresh insights from European Union," Renewable Energy, Elsevier, vol. 216(C).
    • Handle: RePEc:eee:renene:v:216:y:2023:i:c:s0960148123008443
    DOI: 10.1016/j.renene.2023.118938
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    1. Lin Wang & Yugang He & Renhong Wu, 2024. "The Green Engine of Growth: Assessing the Influence of Renewable Energy Consumption and Environmental Policy on China’s Economic Sustainability," Sustainability, MDPI, vol. 16(8), pages 1-25, April.
    2. Zhang, Meng-Chen & Lin, Chun-Yu & Wei, Ying, 2023. "Natural resources exploration, efficiency of energy resources and financial development: Resources sector analysis via least square with structural breaks," Resources Policy, Elsevier, vol. 85(PA).
    3. Min Zhang & Chengrong Li & Jinshan Zhang & Hongwei Chen, 2023. "How Green Finance Affects Green Total Factor Productivity—Evidence from China," Sustainability, MDPI, vol. 16(1), pages 1-18, December.

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