Green finance and the resource curse: low-carbon transition performance in developing Asia

Resource-rich developing countries in Asia face substantial challenges in pursuing sustainable development because their growth models remain closely tied to natural-resource dependence, carbon-intensive production, and uneven institutional capacity. Although green finance is widely regarded as an important policy instrument for supporting low-carbon transition, its effectiveness in resource-dependent economies remains insufficiently understood. Drawing on the resource-curse perspective and an econ–ESG framework, this study examines whether and under what conditions green finance is associated with low-carbon transition performance in 21 developing Asian countries during 2013–2022. Using a spatial Durbin model, we assess both domestic relationships and cross-country interactions while accounting for heterogeneity in resource endowments. The results suggest that several green-finance-related variables are associated with low-carbon transition performance, although the magnitude and stability of these relationships vary across institutional and resource contexts. The findings also indicate that resource endowments condition the relationship between green finance and transition-related performance. Evidence for spatial spillover effects is selective and specification-sensitive rather than strong and uniform across all models. Overall, the study develops a more context-sensitive framework for understanding how resource dependence, governance conditions, and spatial interdependence shape the relationship between green finance and low-carbon transition performance in developing Asia.