Green Growth and Financial Development: A Path to Environmental Sustainability in Pakistan

Abstract

Purpose: The pressing need to reconcile conflicting priorities—fostering economic growth, ensuring environmental sustainability, and mitigating the adverse impacts of greenhouse gas emissions—is becoming increasingly evident.Top of Form Addressing these concerns, the study explore the ramifications of various factors – namely, green growth, foreign direct investment (FDI), financial development (FD), and gross domestic product (GDP) on environmental sustainability. Design/Methodology/Approach: Drawing on data spanning from 1987 to 2022 in the context of Pakistan. This study employs the autoregressive distributed lag (ARDL) technique to check the association between variables. Findings: The study reveals significant empirical insights. Specifically, it highlights the constructive contributions of green growth and financial development toward enhancing environmental quality. Conversely, it underscores the dual role played by GDP and FDI, acting as drivers that intensify CO2 emissions. Implications/Originality/Value: These findings underscore the complexity of the interplay between economic development, environmental considerations, and the pressing need for sustainable practices.

Keywords

• Green growth
• Financial development
• Foreign Direct Investment
• GDP
• ARDL