Impact of Green Financing and Good Governance On Economic Growth: Evidence From Asia Region

Abstract

The main aim of green financing is to encourage financial activities, creating balancing between ecological resources and protecting the environment so that environmental sustainability can be achieved. Good governance influences on economic development are only poorly understood at this point. The main aim to conduct this study is to determine the relationship between green financing and economic growth and explore the influence of Good Governance on Economic Growth. During the period 2013 to 2020, data from seventeen Asian nations that issued green bonds were collected for this research. The majority of the data was gathered from the World Bank's World Development Indicator and World Governance Indicator databases. The pooled OLS Fixed effect and random effect techniques were employed in this investigation. Following the application of relevant tests, we concluded that the model based on GLS fixed effect was better and appropriate. The findings of the FE Model revealed that green finance and good governance have a positive and statistically significant influence on economic growth. Government must provide encouragement for green financial development in developing areas, reduce the issuing and trading threshold values for green bonds as well as green securities, Government should make and implement policies which help in controlling corruption and improve good governance, because governance factors are major factors in improving economic growth of any country