Original scientific paper
https://doi.org/10.1080/1331677X.2021.2012710
Nexus between green financing, economic risk, political risk and environment: evidence from China
Qi Qi Ning
Song Lin Guo
Xiao Chen Chang
Abstract
This study provides fresh evidence regarding the dynamic association that is believed to exist in relation to green finance (GF),
economic growth (GDP), political risk (PR), economic risk (ER), and
carbon dioxide (CO2) emissions. It therefore uses the dataset pertaining to China from most recent time-series – covering the
period spanning from the years of 1990 to 2020, by employing
the Morlet Wavelet Analysis technique. The empirical findings of
the wavelet power spectrum reveal that green finance GF and ER
are vulnerable in the short- and long-run, and the short-run,
respectively. At the same time, no vulnerability has been
observed in the GDP, PR, and CO2 emissions. In addition to this,
the wavelet coherence also reveals the bidirectional causal association that exists between GF-CO2 and ER-CO2, but only in the
short run. It must also be taken into consideration that the causal
influence of CO2 is deemed to be greater than the GF and ER,
respectively. Besides this, a bidirectional causal nexus also exists
between the GDP and CO2 emissions, only in the long run.
Furthermore, the association between the economic growths follows both the phase and antiphase associations. Moreover, the
study also reveals that there is no significant causal link between
the PR and CO2 emissions. The results emphasize that the significance of green finance investment will tend to increase with strict
policy implications, stabilization or minimization of economic risk
and political risk. The same will also take place while promoting
environmentally friendly production via economic growth, so as
to reduce CO2 emission in the region taken into account.
Keywords
Carbon emission; green finance; economic growth; political risk; economic risk; wavelet
Hrčak ID:
302697
URI
Publication date:
31.3.2023.
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