April 18, 2024 | Yanan Shen, Saif Ur Rahman, Nabila Shahzadi Hafiza, Muhammad Saeed Meo, Muhammad Sibt E. Ali
This study investigates the impact of green investment on environmental pollution using an asymmetric ARDL approach in G-7 countries. The research uses annual data from 1997 to 2021 to analyze the relationship between green investment, financial development, and economic growth on environmental pollution. The findings show that positive changes in green investment and negative shocks in green investment have a significant and positive association with environmental pollution in G-7 nations. However, positive changes in financial development have a positive and significant effect on environmental pollution, while negative shocks in financial development have a negative and insignificant relationship with environmental pollution. Additionally, both positive shocks in economic growth and negative shocks in economic growth have a significant and positive link with environmental pollution in G-7 countries. The study also finds that green investments reduce environmental pollution in the long and short term by lowering carbon dioxide emissions. The research highlights the long-term asymmetry between financial development and environmental performance and provides evidence that green investments can help achieve sustainable development goals. The study recommends increasing green investment expenditures to reduce environmental pollution in G-7 nations. It also emphasizes the importance of improving financial sector advancements to support sustainable development. The study uses a nonlinear autoregressive distributed lag (NARDL) model to analyze the asymmetric effects of variables on environmental pollution. The results confirm the inverted U-shaped Environmental Kuznets Curve (EKC) for G-7 countries when CO2 emissions are used as an environmental indicator. The study contributes to the literature by examining the relationship between green investment, financial development, and environmental pollution in G-7 countries using a novel method. The findings suggest that green investments can play a crucial role in reducing environmental pollution and promoting sustainable development. The study also highlights the importance of considering various environmental contamination proxies in future research.This study investigates the impact of green investment on environmental pollution using an asymmetric ARDL approach in G-7 countries. The research uses annual data from 1997 to 2021 to analyze the relationship between green investment, financial development, and economic growth on environmental pollution. The findings show that positive changes in green investment and negative shocks in green investment have a significant and positive association with environmental pollution in G-7 nations. However, positive changes in financial development have a positive and significant effect on environmental pollution, while negative shocks in financial development have a negative and insignificant relationship with environmental pollution. Additionally, both positive shocks in economic growth and negative shocks in economic growth have a significant and positive link with environmental pollution in G-7 countries. The study also finds that green investments reduce environmental pollution in the long and short term by lowering carbon dioxide emissions. The research highlights the long-term asymmetry between financial development and environmental performance and provides evidence that green investments can help achieve sustainable development goals. The study recommends increasing green investment expenditures to reduce environmental pollution in G-7 nations. It also emphasizes the importance of improving financial sector advancements to support sustainable development. The study uses a nonlinear autoregressive distributed lag (NARDL) model to analyze the asymmetric effects of variables on environmental pollution. The results confirm the inverted U-shaped Environmental Kuznets Curve (EKC) for G-7 countries when CO2 emissions are used as an environmental indicator. The study contributes to the literature by examining the relationship between green investment, financial development, and environmental pollution in G-7 countries using a novel method. The findings suggest that green investments can play a crucial role in reducing environmental pollution and promoting sustainable development. The study also highlights the importance of considering various environmental contamination proxies in future research.