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Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe

Growing concerns regarding climate change and the necessity to shift towards a low-carbon economy have resulted in a significant rise in the worth of green finance for developing energy technology. This growing emphasis on green finance underscores the urgency for a nuanced exploration of the asymme...

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Main Authors: Jiu, Jingli, Ali, Sajid, Nazar, Raima, Khan, Ahmad Imran
Format: Article
Language:English
Published: Elsevier 2024
Online Access:http://psasir.upm.edu.my/id/eprint/106297/1/PIIS2405844024011277.pdf
http://psasir.upm.edu.my/id/eprint/106297/
https://linkinghub.elsevier.com/retrieve/pii/S2405844024011277
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spelling my.upm.eprints.1062972024-09-03T04:02:45Z http://psasir.upm.edu.my/id/eprint/106297/ Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe Jiu, Jingli Ali, Sajid Nazar, Raima Khan, Ahmad Imran Growing concerns regarding climate change and the necessity to shift towards a low-carbon economy have resulted in a significant rise in the worth of green finance for developing energy technology. This growing emphasis on green finance underscores the urgency for a nuanced exploration of the asymmetric nexus between green investment and energy innovation in Europe. The present article investigates the asymmetric relationship between green investment and energy innovation in the top ten European nations with the highest green investment (France, Netherlands, Germany, Italy, Spain, Denmark, Austria, Finland, the UK, and Sweden). Formerly, panel data methodologies were employed to observe the link between green investment and energy innovation despite the absence of an exclusive connection in certain economies. On the other hand, this study uses ‘Quantile-on-Quantile’ approach for econometric estimation using the annual data from 2007 to 2022. This unique methodology enables a detailed and specific analysis of time-series interdependence in every economy, providing valuable perceptions of the nuanced relationship between these variables. Investment in renewable energy is employed as a proxy for green investment, while energy-related patents represent energy innovation. The study employs a quantile cointegration test to assess the variables long-run relationship. The results indicate a positive correlation between green investment and energy innovation in many countries at certain data points. Additionally, the analysis demonstrates that the extent of asymmetry between these variables varies across countries, stressing policymakers' need to closely monitor fluctuations in green investment and energy innovation. Elsevier 2024 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/106297/1/PIIS2405844024011277.pdf Jiu, Jingli and Ali, Sajid and Nazar, Raima and Khan, Ahmad Imran (2024) Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe. Heliyon, 10 (3). ISSN 2405-8440 https://linkinghub.elsevier.com/retrieve/pii/S2405844024011277 10.1016/j.heliyon.2024.e25096
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Growing concerns regarding climate change and the necessity to shift towards a low-carbon economy have resulted in a significant rise in the worth of green finance for developing energy technology. This growing emphasis on green finance underscores the urgency for a nuanced exploration of the asymmetric nexus between green investment and energy innovation in Europe. The present article investigates the asymmetric relationship between green investment and energy innovation in the top ten European nations with the highest green investment (France, Netherlands, Germany, Italy, Spain, Denmark, Austria, Finland, the UK, and Sweden). Formerly, panel data methodologies were employed to observe the link between green investment and energy innovation despite the absence of an exclusive connection in certain economies. On the other hand, this study uses ‘Quantile-on-Quantile’ approach for econometric estimation using the annual data from 2007 to 2022. This unique methodology enables a detailed and specific analysis of time-series interdependence in every economy, providing valuable perceptions of the nuanced relationship between these variables. Investment in renewable energy is employed as a proxy for green investment, while energy-related patents represent energy innovation. The study employs a quantile cointegration test to assess the variables long-run relationship. The results indicate a positive correlation between green investment and energy innovation in many countries at certain data points. Additionally, the analysis demonstrates that the extent of asymmetry between these variables varies across countries, stressing policymakers' need to closely monitor fluctuations in green investment and energy innovation.
format Article
author Jiu, Jingli
Ali, Sajid
Nazar, Raima
Khan, Ahmad Imran
spellingShingle Jiu, Jingli
Ali, Sajid
Nazar, Raima
Khan, Ahmad Imran
Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe
author_facet Jiu, Jingli
Ali, Sajid
Nazar, Raima
Khan, Ahmad Imran
author_sort Jiu, Jingli
title Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe
title_short Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe
title_full Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe
title_fullStr Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe
title_full_unstemmed Breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in Europe
title_sort breaking barriers to climate finance: asymmetric nexus between green investment and energy innovation in europe
publisher Elsevier
publishDate 2024
url http://psasir.upm.edu.my/id/eprint/106297/1/PIIS2405844024011277.pdf
http://psasir.upm.edu.my/id/eprint/106297/
https://linkinghub.elsevier.com/retrieve/pii/S2405844024011277
_version_ 1811685933047611392
score 13.211869

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