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Contribution of green bonds and green growth in clean energy capacity under the moderating role of political stability

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  • Shah, Syed Sumair
  • Murodova, Gulnora
  • Khan, Anwar

Abstract

The current study proposes links between green bonds, green growth, and clean energy capacity under the moderating effect of political stability for the top 25 green bond-issuing countries. The data between 2014 and 2021 is analyzed using instrumental variable GMM (IV-GMM) and Driscoll and Kraay (D&K) approaches. The results from IV-GMM indicated that a one per cent rise in green bonds drives clean energy capacity by 0.350 % [0.029 % with D&K]. Likewise, the outcomes show an incremental response of 0.398 % [0.008 % with D&K] on clean energy capacity with a one per cent increase in green growth for chosen countries. Regarding the moderating relationship, the outcomes proved that political stability is conducive to enhancing the relationship between green bonds-clean energy capacity [0.116 %] and green growth-clean energy capacity [0.452 %] for the selected countries. The results from changing the green finance variable and estimations with different approaches [Fully modified-OLS and Quantile regression] further authenticated the results. Based on these connections, we propose policymakers design integrated policies on green finance and growth to boost renewable energy infrastructure, ensuring a stable political system to attract investors for enduring green energy progress.

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  • Shah, Syed Sumair & Murodova, Gulnora & Khan, Anwar, 2025. "Contribution of green bonds and green growth in clean energy capacity under the moderating role of political stability," Renewable Energy, Elsevier, vol. 246(C).
    • Handle: RePEc:eee:renene:v:246:y:2025:i:c:s0960148125005506
    DOI: 10.1016/j.renene.2025.122888
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