Dynamic association of green financial innovation, eco-financing, carbon tax, economic openness, and sustainable energy transition in Vietnam: fresh evidence using DARDL approach

Abstract

Sustainable energy (SE) transition and environmental quality have become a predominant part of integral policy worldwide. Besides, economic development policies at global level are being reformulated to make sure that energy supplies are reliable and have the tendency to protect environment. Although, economies are participating in activities which can help to fulfill overarching goals but developing economies specifically face challenges due to high dependency on coal consumption. The article, thereby, intends to explore the role of green financial innovation, eco-financing, carbon taxes, and economic openness on the SE transition in Vietnam. The study also checks the role of inflation and industrialization on the SE transition as control variables. The article also used Dynamic Auto-regressive Distributed Lags (DARDL) to test the connection among the variables. The outcome indicated that green financial innovation, eco-financing, carbon taxes, economic openness, inflation, and industrialization have a positive and significant linkage with the SE transition in Vietnam. These outcomes provide guidelines to policymakers in establishing new policies regarding SE transition.