TWO ESSAYS ON FINANCIAL GLOBALIZATION AND SUSTAINABLE DEVELOPMENT: A STRATEGY FORMULATION STUDY FOR ENHANCING GREEN FINANCING

Abstract

During recent decades, the rise in worldwide greenhouse gas emissions has enabled economies to attain ecological sustainability by minimizing environmental degradation. Global warming has also increased the environmental risk, allowing academics and policymakers to investigate the link between economic growth and environmental protection. But the factors influencing sustainable development and financial globalization are still unclear. This study identifies the impact of green technology innovation, economic growth, and foreign direct investment on sustainable development and financial globalization through the mediation of renewable energy consumption and moderation of government intervention. The quantitative methodology was utilized to analyze the panel data set of 126 nations from 2001 to 2019 through Stata and Hayes PROCESS macro. Furthermore, to check the data robustness, causality, and stationery, a series of second-generation techniques such as CIPS and CADF unit root, Westerlund Panel cointegration, as well as FMOLS, DOLS, and Dumitrescu-Hurlin panel causality test was utilized. The study's (model 1) findings suggest that green technology innovation and foreign direct investment positively influence sustainable development. While economic growth has an inverse relationship with sustainable development as growing economies typically use more resources, produce more waste, and release more pollution. Even though government intervention moderates negatively with economic growth and foreign direct investment but the government laws and policies boost the effect of green technology innovation on the sustainable development of the country. In contrast, the study 's model 2 findings reveal that green technology innovation, foreign direct investment, and economic growth enhance the economy's financial globalization. On the other hand, government policies are not complying with the economic growth, foreign direct investment, and green xxii technology innovation, resulting in a rise in government intervention that enables an inverse relationship of the constructs of the financial globalization of an economy. Besides that, the findings reveal that renewable energy consumption plays a significant role as a mediator in both models. However, the study findings imply that various countries could improve environmental performance by developing and implementing more targeted policies and green finance. This study makes substantial ideas for policy implications based on the inclusive findings of the research. Specifically, policymakers can establish environmentally friendly trade policies, investigate choices for renewable energy, and adopt green investment and financing strategies to improve the environment. Keywords: Green Technology Innovation, Renewable Energy Consumption, Sustainable Development, Economic Growth, Financial Globalization