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Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax

Abstract: Green finance, clean technology innovation (CTI), and environmental tax are all eco-friendly measures for diminishing environmental degradation. Few studies have examined how these variables work together to realize the object of green growth (GG). Therefore, this research aims to examine...

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Main Authors: Kharuddin, Saira, Wei, Deng, Mohd Ashhari, Zariyawati
Format: Article
Language:English
Published: ScienceDirect 2024
Subjects:
Finance
Economic development - Environmental aspects
Taxation
Online Access:http://psasir.upm.edu.my/id/eprint/111194/1/Deng%2C%20Kharuddin%20%26%20Ashhari%20%282024%29%20-%20JCP.pdf
http://psasir.upm.edu.my/id/eprint/111194/
https://www.sciencedirect.com/science/article/pii/S0959652624010904
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spelling my.upm.eprints.1111942024-07-10T07:45:57Z http://psasir.upm.edu.my/id/eprint/111194/ Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax Kharuddin, Saira Wei, Deng Mohd Ashhari, Zariyawati Abstract: Green finance, clean technology innovation (CTI), and environmental tax are all eco-friendly measures for diminishing environmental degradation. Few studies have examined how these variables work together to realize the object of green growth (GG). Therefore, this research aims to examine the role of the above factors in achieving GG by using 28 developed countries from 1995 to 2019. These countries have passed over a time of fast progress at the expense of heavy pollution and hence have moved their emphasis to GG. This paper starts with the construction of the GG index based on entropy-weighted TOPSIS, followed by pooled OLS, fixed effect, random effect, the two-step least-square estimator (2SLS), and the System GMM models for hypothesis testing. From the findings, it is obsense of that: (1) Green finance positively affects GG; the higher the levels of GG, the greater the enhancement of green finance on GG. (2) CTI favorably mediates the impact of green finance on GG, and the mediating effect accounts for 14.06% of the overall effect. (3) Environmental tax has a significant threshold effect on the link between green finance and CTI; when high levels of environmental taxes are maintained, the influence of green finance on enterprises' CTI is greatly strengthened, with an increase of 53%. GG will be further promoted by the advancement of enterprises' CTI. Finally, emerging counties would benefit from this study in designing frameworks of green finance, environmental tax, and CTI policies to achieve GG. ScienceDirect 2024-04-05 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/111194/1/Deng%2C%20Kharuddin%20%26%20Ashhari%20%282024%29%20-%20JCP.pdf Kharuddin, Saira and Wei, Deng and Mohd Ashhari, Zariyawati (2024) Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax. Journal of Cleaner Production, 448. art. no. 141642. pp. 1-10. ISSN 0959-6526 https://www.sciencedirect.com/science/article/pii/S0959652624010904 Finance Economic development - Environmental aspects Taxation 10.1016/j.jclepro.2024.141642
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
topic Finance
Economic development - Environmental aspects
Taxation
spellingShingle Finance
Economic development - Environmental aspects
Taxation
Kharuddin, Saira
Wei, Deng
Mohd Ashhari, Zariyawati
Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax
description Abstract: Green finance, clean technology innovation (CTI), and environmental tax are all eco-friendly measures for diminishing environmental degradation. Few studies have examined how these variables work together to realize the object of green growth (GG). Therefore, this research aims to examine the role of the above factors in achieving GG by using 28 developed countries from 1995 to 2019. These countries have passed over a time of fast progress at the expense of heavy pollution and hence have moved their emphasis to GG. This paper starts with the construction of the GG index based on entropy-weighted TOPSIS, followed by pooled OLS, fixed effect, random effect, the two-step least-square estimator (2SLS), and the System GMM models for hypothesis testing. From the findings, it is obsense of that: (1) Green finance positively affects GG; the higher the levels of GG, the greater the enhancement of green finance on GG. (2) CTI favorably mediates the impact of green finance on GG, and the mediating effect accounts for 14.06% of the overall effect. (3) Environmental tax has a significant threshold effect on the link between green finance and CTI; when high levels of environmental taxes are maintained, the influence of green finance on enterprises' CTI is greatly strengthened, with an increase of 53%. GG will be further promoted by the advancement of enterprises' CTI. Finally, emerging counties would benefit from this study in designing frameworks of green finance, environmental tax, and CTI policies to achieve GG.
format Article
author Kharuddin, Saira
Wei, Deng
Mohd Ashhari, Zariyawati
author_facet Kharuddin, Saira
Wei, Deng
Mohd Ashhari, Zariyawati
author_sort Kharuddin, Saira
title Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax
title_short Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax
title_full Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax
title_fullStr Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax
title_full_unstemmed Green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax
title_sort green finance transforms developed countries’ green growth: mediating effect of clean technology innovation and threshold effect of environmental tax
publisher ScienceDirect
publishDate 2024
url http://psasir.upm.edu.my/id/eprint/111194/1/Deng%2C%20Kharuddin%20%26%20Ashhari%20%282024%29%20-%20JCP.pdf
http://psasir.upm.edu.my/id/eprint/111194/
https://www.sciencedirect.com/science/article/pii/S0959652624010904
_version_ 1805889532755705856
score 13.211869

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