The impact of green finance on green growth: The role of green energy and green production

This study examines the linkage of green finance and green growth under the regulatory role of green energy and green production in 52 countries worldwide from 2005 to 2019. Applying the Bayesian regression and GMM regression, the results of these two methods are similar. When ignoring the regulatory role of green energy and green production, green finance negatively impacts green growth. This result is entirely opposite when considering the regulatory role of green energy and green production, green finance impacts green growth positively. However, Bayesian regression is more effective when providing different posterior probability intervals and probability ranges for independent variables to affect the dependent variable. Specifically, the probability that green financial growth has a negative impact on green growth is above 75.86 %. Similarly, under the role of green energy, the probability that green finance growth has a positive impact on green growth is 80.45 % and under the role of green production, this probability is 76.64 %. These findings imply that countries should build a financial system associated with the goal of green energy and green production, thereby helping the economy become greener.