THE ASYMMETRIC IMPACT OF GREEN FINANCE ON THE ECONOMIC DIMENSION OF SUSTAINABLE DEVELOPMENT DURING THE PERIOD (2014Q1-2022Q4): AN EMPIRICAL STUDY OF THE CASE OF BANGLADESH

Abstract

      In the face of urgent environmental challenges and the increasing need for sustainable development, green financing has emerged as a potential solution to address both environmental and economic concerns. This empirical study focuses on examining the asymmetric impact of green financing on the economic dimension of sustainable development in Bangladesh over the period from the first quarter of 2014 to the fourth quarter of, using Nonlinear Autoregressive Distributed Lag (NARDL) models and Wald test. The hypothesis of nonlinearity in the impact of green financing on the economic dimension of sustainable development in both the short and long terms was verified. Short-term estimation results indicate that growth rates respond only to positive values of green financing, where an increase in the latter leads to short-term growth. Conversely, an increase in green financing also positively affects long-term growth rates with an estimated elasticity of 0.47%. However, negative values in green financing have a negative impact on economic growth rates in Bangladesh in the long term