Nexus between green finance and climate change mitigation in N-11 and BRICS countries: empirical estimation through diff
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RESEARCH ARTICLE
Nexus between green finance and climate change mitigation in N-11 and BRICS countries: empirical estimation through difference in differences (DID) approach Muhammad Atif Nawaz 1
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& Usha Seshadri & Pranav Kumar & Ramaisa Aqdas & Ataul Karim Patwary & Madiha Riaz
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Received: 18 August 2020 / Accepted: 17 September 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Green finance is inextricably linked to investment risk, particularly in emerging and developing economies (EMDE). This study uses the difference in differences (DID) method to evaluate the mean causal effects of a treatment on an outcome of the determinants of scaling up green financing and climate change mitigation in the N-11 countries from 2005 to 2019. After analyzing with a dummy for the treated countries, it was confirmed that the outcome covariates: rescon (renewable energy sources consumption), population, FDI, CO2, inflation, technical corporation grants, domestic credit to the private sector, and research and development are very significant in promoting green financing and climate change mitigation in the study countries. The probit regression results give a different outcome, as rescon, FID, CO2, Human Development Index (HDI), and investment in the energy sector by the private sector that will likely have an impact on the green financing and climate change mitigation of the study countries. Furthermore, after matching the analysis through the nearest neighbor matching, kernel matching, and radius matching, it produced mixed results for both the treated and the untreated countries. Either group experienced an improvement in green financing and climate change mitigation or a decrease. Overall, the DID showed no significant difference among the countries. Keywords Difference in difference . CO2 . Economic development . Probit regression . N-11 and BRICS countries
Introduction Climate risk is investment risk. Green finance is the panacea to dealing with these risks. Green finance became popular in the 1980s and continues to attract attention globally. Green
finance explains the situation whereby business objectives are achieved while considering environmental benefits. Contrary to the conventional financial transaction, green finance has to do with environmental activities that protect the environment from degradation (Wang and Zhi 2016). The
Responsible editor: Nicholas Apergis * Muhammad Atif Nawaz [email protected] Usha Seshadri [email protected]
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Department of Economics, The Islamia University of Bahawalpur, Bahawalpur, Pakistan
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VIT-AP School of Business, Amaravati, India
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School of Business, Skyline University College, Sharjah, United Arab Emirates
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Department of Business Administration, Iqra University, Karachi, Pakistan
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School of Tourism, Hospitality and Event Management, University Utara Malaysia, Changlun, Malaysia
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Department of Economics, Ghazi University, Dera Ghazi Khan, Pakistan
Pranav Kumar [email protected] Ramaisa Aqdas ramaisa.aqd
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