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Is green finance capable of promoting renewable energy technology? Empirical investigation for 64 economies worldwide

Author

Listed:
  • Mingbo Zheng

    (Chang’an University, China)

  • Gen-Fu Feng

    (Xi’an Jiaotong University, China)

  • Chun-Ping Chang

    (Shih Chien University, Taiwan)

Abstract

Research background: As an outcome of a global consensus on combating climate change, green finance is expected to play an important role in promoting green growth and innovation progress. Some studies note that green credit policy yields a negative influence on green innovation, while how green finance affects renewable energy innovation has received scant attention in academia. This study focuses on the impact of green finance on renewable energy innovation. Purpose of the article: This research investigates the influence of green finance on an economy’s renewable energy innovation by using green bond data from the Climate Bonds Initiative. This research further tests whether it varies for different kinds of energy types and economic development levels. Given that policies are key to renewable energy technology development, this research checks whether government stability changes the relationship between green finance and renewable energy innovation. Methods: Using the panel fixed effects model and big-scale data from 64 economies worldwide during the period 2014–2019, we investigate green finance's impact on renewable energy innovation. In the robustness test, the dynamic panel model and the panel Tobit model are employed. Findings & value added: This research finds that green finance has a positive effect on renewable energy innovation. This effect is prominent in non-OECD economies as well as middle-income and low-income economies. Government stability enhances the influence of green finance on renewable energy innovation. Moreover, the results indicate that green finance mainly promotes innovation progress for wind energy and produces little effect for other renewable energies. The subsample analysis also sheds light on the heterogeneity of the role of green finance in promoting renewable energy innovation.

Suggested Citation

  • Mingbo Zheng & Gen-Fu Feng & Chun-Ping Chang, 2023. "Is green finance capable of promoting renewable energy technology? Empirical investigation for 64 economies worldwide," Oeconomia Copernicana, Institute of Economic Research, vol. 14(2), pages 483-510, June.
    • Handle: RePEc:pes:ieroec:v:14:y:2023:i:2:p:483-510
    DOI: 10.24136/oc.2023.013
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    5. Ping‐Chuan Jiang & Gen‐Fu Feng & Hai‐Jie Wang & Chun‐Ping Chang, 2024. "CSR from different perspectives: The global ESG indexes updated," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4694-4714, September.
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    8. Niu, Bingcheng, 2024. "Government environmental protection expenditure and national ESG performance: Global evidence," Innovation and Green Development, Elsevier, vol. 3(2).
    9. Niu, Peng & Sun, Kun & Sun, Lirong & Chang, Chao-Wen, 2024. "The political economy and green innovation: A scientometric analysis," Innovation and Green Development, Elsevier, vol. 3(2).
    10. Florin Vaduva & Luiela Magdalena Csorba & Dan-Cristian Dabija & George Lăzăroiu, 2024. "The Impact of Public Policies and Civil Society on the Sustainable Behavior of Romanian Consumers of Electrical and Electronic Products," Sustainability, MDPI, vol. 16(3), pages 1-16, February.
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    More about this item

    Keywords

    green finance; renewable energy innovation; green innovation; long term sustainability; sustainable growth;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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