Environmental performance, green finance and green innovation: What's the long-run relationships among variables?

Quan-Jing Wang, Hai-Jie Wang and Chun-Ping Chang

Energy Economics, 2022, vol. 110, issue C

Abstract: What are the relationships among environmental performance, green finance, and green innovation in developing countries? Existing literatures support the impact of green finance or green innovation on environmental performance, but rare studies query the cointegration among such three variables. We thus utilize the yearly data of 57 developing countries from 2002 to 2016 to empirically examines the relationships among environmental performance, green finance, and green innovation, via panel covariate-augmented Dickey-Fuller unit root test and the Westerlund and Edgerton (2007) cointegration test. Overall, this study confirms the existence of cointegration relationships among these variables. Moreover, the results of pooled mean group estimation suggest that environmental performance can positively affect the green innovation in the long term in the non-emerging countries and countries with better green innovation or environmental performance. Furthermore, green finance positively affects green innovation in the emerging countries and countries with lower level of green finance, while green finance negatively affects green innovation in the countries with better green innovation or environmental performance. Our empirical findings offer important policy implications for the sample of developing countries to promote green innovation and improve environmental performance.

Keywords: Green innovation; Environmental performance; Green finance; Cross-section dependence; Cointegration (search for similar items in EconPapers)
JEL-codes: C01 C32 Q40 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:110:y:2022:i:c:s0140988322001761

DOI: 10.1016/j.eneco.2022.106004

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