Green Finance and Economic Growth: Empirical Evidence from Panel Data Using CCEMG and PCSE Methods

Abstract

This article constructs a comprehensive Green Finance Index (GFI) to explore the connection between sustainable finance and economic growth across 43 developed and developing countries, as classified by the International Monetary Fund (IMF), over the period 2013 to 2023. The GFI is developed based on three core dimensions—Finance, Environment, and Economy—using indicators such as green bonds, green loans, green investments, greenhouse gas emissions, forestry, and energy intensity of the economy. A min-max normalization method is employed to ensure comparability across countries and overtime. Using the Common Correlated Effects Mean Group (CCEMG) estimator as the primary methodology and the Panel-Corrected Standard Errors (PCSE) approach as a robustness check; the study investigates both the long-term and short-term dynamics of this relationship. The results reveal a clear contrast between short-run and long-run effects: while trade openness demonstrates a statistically significant and immediate impact on economic growth in the short run, green finance exerts its influence primarily over the long term. This suggests that sustainable financial investments contribute to economic development in a gradual and structural manner, highlighting the importance of long-term policy commitment and integration of green finance mechanisms into national and international economic strategies.

Keywords

• Green Finance İndex
• Economic Growth
• CCEMG

Supporting Institution

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Ethical Statement

This study was from the doctoral thesis titled “Finance choice with green finance and FinTech integration: Testing the finance hierarch theory” prepared by Asuda Yunusova Ceviz for Niğde Ömer Halis Demir University Institute of Social Sciences under the consultancy of Prof. Dr. Hatice Işın Dizdarlar Erdoğan, and was presented as an oral presentation at the 3rd International Insurance, Banking and Finance Symposium held in Niğde on July 8-10, and its abstract was published in the book of proceedings of the aforementioned symposium. It is declared that scientific and ethical principles have been followed while carrying out and writing this study and that all the sources used have been properly cited.

Thanks

I remember with gratitude my very valuable Prof.Dr. Hatice Işın Dizdarlar Erdoğan, who was always with me during this period, supported me with her compassion and love, and who recently passed away. I express my deep gratitude to her.

Yeşil Finans ve Ekonomik Büyüme: CCEMG ve PCSE Yöntemlerini Kullanarak Panel Verilerinden Elde Edilen Ampirik Kanıtlar

Abstract

Bu makale, Uluslararası Para Fonu (IMF) tarafından sınıflandırılan 43 gelişmiş ve gelişmekte olan ülkede, 2013-2023 döneminde sürdürülebilir finans ve ekonomik büyüme arasındaki bağlantıyı incelemek için kapsamlı bir Yeşil Finans Endeksi (GFI) oluşturmaktadır. GFI, yeşil tahviller, yeşil krediler, yeşil yatırımlar, sera gazı emisyonları, ormancılık ve ekonominin enerji yoğunluğu gibi göstergeleri kullanarak Finans, Çevre ve Ekonomi olmak üzere üç temel boyuta dayalı olarak geliştirilmiştir. Ülkeler arası ve zaman içinde karşılaştırılabilirliği sağlamak için bir min-maks normalizasyon yöntemi kullanılmıştır. Birincil metodoloji olarak Ortak Korelasyonlu Etkiler Ortalama Grubu (CCEMG) tahmin edicisini ve sağlamlık kontrolü olarak Panel Düzeltmeli Standart Hatalar (PCSE) yaklaşımını kullanarak; çalışma bu ilişkinin hem uzun vadeli hem de kısa vadeli dinamiklerini araştırmaktadır. Sonuçlar, kısa vadeli ve uzun vadeli etkiler arasında net bir karşıtlık olduğunu ortaya koymaktadır: ticaret açıklığı kısa vadede ekonomik büyüme üzerinde istatistiksel olarak anlamlı ve anında bir etki gösterirken, yeşil finans etkisini öncelikle uzun vadede göstermektedir. Bu durum, sürdürülebilir finansal yatırımların ekonomik kalkınmaya kademeli ve yapısal bir şekilde katkıda bulunduğunu, uzun vadeli politika taahhütlerinin ve yeşil finans mekanizmalarının ulusal ve uluslararası ekonomik stratejilere entegre edilmesinin önemini vurgulamaktadır.

Keywords

• Yeşil finans endeksi
• CCEMG
• Ekonomi büyüme

Supporting Institution

Çalışma, kamusal, özel, ticari nitelikte ya da kâr amacı gütmeyen herhangi bir kurumdan destek alınmadan hazırlanmıştır.

Ethical Statement

Bu çalışma, Niğde Ömer Halis Demir Üniversitesi Sosyal Bilimler Enstitüsü'nde Prof. Dr. Hatice Işın Dizdarlar Erdoğan danışmanlığında Asuda Yunusova Ceviz tarafından hazırlanan “Yeşil finans ve FinTech entegrasyonu ile finans seçimi: Finans hiyerarşi teorisinin test edilmesi” başlıklı doktora tezinden türetilmiş olup, 8-10 Temmuz tarihlerinde Niğde'de düzenlenen 3. Uluslararası Sigortacılık, Bankacılık ve Finans Sempozyumu'nda sözlü bildiri olarak sunulmuş ve söz konusu sempozyumun bildiri kitabında özeti yayımlanmıştır. Bu çalışmanın yürütülmesi ve yazılması sırasında bilimsel ve etik ilkelere uyulduğu, kullanılan tüm kaynakların da doğru bir şekilde alıntılandığı beyan edilmektedir.

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