EVALUATING THE RELATIONSHIP BETWEEN FOSSIL FUEL TRANSFORMATION, SME DEVELOPMENT, GREEN GROWTH, AND SUSTAINABLE FINANCE

This study examines the effects of small and medium-sized enterprise (SME) development, green transition efforts, and green finance on green growth in 15 developing Asian countries from 2005 to 2019, utilizing the Cross-Sectionally Fully Modified Ordinary Least Squares (CS-FMOLS) method. The results highlight key findings: a 1% increase in green energy generation is associated with a 0.54% boost in green growth, emphasizing advantages such as reduced reliance on fossil fuels and technological advancements. Additionally, a 1% rise in green finance leads to a 0.38% increase in green growth, illustrating its importance in financing renewable energy initiatives. On the other hand, SME growth is linked to a slight 0.018% decrease in green growth, suggesting the need for focused efforts to promote sustainability within SMEs. The negative coefficient of Information and Communication Technology (ICT) development points to its current inefficacy in advancing green growth, primarily due to the reliance on fossil fuel-based infrastructure. Finally, a 1% increase in the poverty ratio correlates with a 0.46% decline in green growth, highlighting the challenges poverty poses to sustainable investment. Based on these findings, policy recommendations include encouraging the adoption of renewable energy, enhancing green finance frameworks, assisting SMEs in implementing sustainable practices, improving energy efficiency in ICT, promoting the creation of green jobs, and establishing comprehensive monitoring systems.