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Public spending and green economic growth in BRI region: Mediating role of green finance

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  • Zhang, Dongyang
  • Mohsin, Muhammad
  • Rasheed, Abdul Khaliq
  • Chang, Youngho
  • Taghizadeh-Hesary, Farhad

Abstract

Generally, public spending on education, research, and development (R&D) is perceived to impact the economy and sustainability positively; however, such notion lacks evidence, particularly in Belt and Road Initiative (BRI) member countries. In this study, panel data of BRI member countries from 2008 to 2018 is analysed using the generalized method of moments (GMM) method and data envelopement analysis (DEA) to assess the relationship between public spending on R&D and green economic growth and energy efficiency. The study found a fluctuating green economic growth indicator during the research period attributed to the non-serious nature of government policies. The findings reveal that the GMM method confirms both composition and technique effects in the entire sample. Nonetheless, the result of the sub-sample showed a heterogeneous effect on high GDP per capita countries. Moreover, the study shows that public spending on human resources and R&D of green energy technologies prompts a sustainable green economy through labour and technology-oriented production activities and different effects in different countries.

Suggested Citation

  • Zhang, Dongyang & Mohsin, Muhammad & Rasheed, Abdul Khaliq & Chang, Youngho & Taghizadeh-Hesary, Farhad, 2021. "Public spending and green economic growth in BRI region: Mediating role of green finance," Energy Policy, Elsevier, vol. 153(C).
    • Handle: RePEc:eee:enepol:v:153:y:2021:i:c:s0301421521001257
    DOI: 10.1016/j.enpol.2021.112256
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    More about this item

    Keywords

    Green public finance; Sustainable green finance; Radial direction distance function; Belt and road initiative; Generalized method of moments;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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