THE ROLE OF FINANCIAL DEVELOPMENT ON GREEN LOGISTICS IN EMERGING OECD COUNTRIES: A PANEL ARDL APPROACH

Abstract

Purpose- This study examines the dynamic relationship between financial development and green logistics in emerging OECD countries by applying a panel ARDL approach. Inspired by Özaytürk and Özekenci (2024), the main goal is to understand how financial development contributes to green logistics transformation in economies with evolving financial infrastructures. Methodology- The analysis covers nine emerging OECD countries (Turkey, Poland, Mexico, Hungary, Slovakia, Colombia, Latvia, Lithuania, and Estonia) from 2002 to 2021. The dependent variable is the ratio of transport-related CO₂ emissions to GDP, used as a proxy for green logistics performance (Fan et al., 2022). Financial development (FD), foreign direct investment (FDI), and trade openness (TO) serve as explanatory variables. Panel ARDL modeling is employed to capture both long-run and short-run effects, with cross-sectional dependence tested using Pesaran CD (2004), stationarity examined via Levin-Lin-Chu (2002), and common factor structure assessed using PANIC (Bai & Ng, 2004). Findings- Empirical findings suggest that financial development has a statistically significant and negative effect on CO₂ emissions in the long term, confirming its role in supporting green logistics (Jinru et al., 2022; Xu & Li, 2024). In contrast, FDI and TO do not exhibit significant long-run effects. The short-term impacts of all variables were found to be statistically insignificant, highlighting the crucial importance of institutional quality and environmental governance (Agyabeng-Mensah & Tang, 2021; Barut et al., 2023). Conclusion- The study underscores the pivotal role of financial development in facilitating green logistics by easing access to environmentally friendly investments. However, financial mechanisms alone are not sufficient; complementary policy tools such as strong environmental regulations, institutional capacity, and governance reforms are necessary to ensure sustainable green logistics transitions in emerging economies (Xu & Li, 2024)..

Keywords

• Green logistics
• financial development
• foreign direct investment
• trade openness
• panel ARDL

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