Green finance, financial development, energy efficiency and sustainable economic growth in Asia countries: the moderating role of environmental regulations and natural resources abundance

Abstract

This study examined the impact of green finance and financial development on energy efficiency and sustainable economic development in 49 Asia countries from 2013 to 2022. By using GMM estimator, this research found that green finance has no effect on energy efficiency and sustainable economic growth. Moreover, financial development has a positive impact on energy efficiency and economic sustainability. Regarding the moderating role, environmental regulations are important channels for green finance to further promote energy efficiency. Natural resources abundance supports financial development in promoting sustainable economic growth. Noticeably, financial institutions showed a larger influence on energy efficiency and sustainable economic development compared to financial markets. Moreover, those countries with carbon neutral targets showed a higher impact from green finance and financial development than those without carbon reduction commitment. These findings are expected to make an outstanding contribution to the development of green finance and financial development to deal with energy intensity and enhance sustainability.