The Relationship Between Financial Indicators and Sustainability: A Comparative Analysis of Nordic and MINT Countries

Hasan Tutar, Yusuf Bahadır Kavas, Batuhan Medetoğlu, Yuriy Bilan, Dalia Štreimikienė, Sümeyra Uzun and Arif Saldanlı

Corporate Social Responsibility and Environmental Management, 2025, vol. 32, issue 5, 6449-6460

Abstract: This study aims to provide a comparative analysis of the relationship between financial indicators and sustainability in Nordic and MINT countries and to identify the relationships between indicators. Understanding the balance between economic indicators and environmental sustainability is critical in formulating and implementing sustainable development policies. The analysis covered the period 1990–2020, and the sustainability and financialization status of the two country groups were tested with panel data analysis. In the study, the analysis was carried out with nine variables to represent CO2 emissions, financial indicators, and sustainability indicators. In the panel data analysis, various assumption tests were performed on the underlying assumptions for the Pesaran Smith mean group estimator. By the purpose of the study, the analysis confirmed significant differences between the two country groups. The important variables in the models are the Efficiency of Financial Institutions Index and renewable energy consumption for developed countries, while the ratio of deposits in the financial system to GDP and renewable energy consumption are for developing countries. Within the scope of the study, the level of mutual influence of variables was also tested. Separate results were obtained for the developed group of Nordic countries and the developing group of MINT countries. In this context, it has been determined that the increase in renewable energy consumption for both country groups reduces CO2 emissions. In addition, a positive relationship was found between the Efficiency of Financial Institutions Index and CO2 emissions for the developed country group. In contrast, a negative relationship was found between CO2 emissions and the ratio of deposits in the financial system to GDP in developing countries. This study aims to provide a comparative analysis of the relationship between financial indicators and sustainability in Nordic and MINT countries and to identify the relationships between indicators. Understanding the balance between economic indicators and environmental sustainability is critical in formulating and implementing sustainable development policies. The analysis covered the period 1990–2020, and the sustainability and financialization status of the two country groups were tested with panel data analysis. In the study, the analysis was carried out with nine variables to represent CO2 emissions, financial indicators, and sustainability indicators. In the panel data analysis, various assumption tests were performed on the underlying assumptions for the Pesaran‐Smith mean group estimator. By the purpose of the study, the analysis confirmed significant differences between the two country groups. The important variables in the models are the Financial Institutions Efficiency Index and renewable energy consumption for developed countries, while the financial system deposits to GDP and renewable energy consumption for developing countries. Within the scope of the study, the level of mutual influence of variables was also tested. Separate results were obtained for the developed group of Nordic countries and the developing group of MINT countries. In this context, it has been determined that the increase in renewable energy consumption for both country groups reduces CO2 emissions. In addition, a positive relationship was found between the Financial Institutions Efficiency Index and CO2 emissions for the developed country group. In contrast, a negative relationship was found between CO2 emissions and the financial system deposits to GDP in developing countries.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:32:y:2025:i:5:p:6449-6460

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