Abstract
The study’s overarching objective is to evaluate FDI’s contribution to China’s renewable energy sector and the country’s ongoing energy transformation. The industrial sector of China’s economy is contributing enormously to the country’s overall growth. The primary goal of this research is to examine the impact of asymmetric positive–negative shocks on China’s economic development via the lenses of measurements of industrial value-added, FDI, technical innovation, and natural assets. Empirical short-run and long-run asymmetric estimations using N-ARDL are performed using indicator data from 1986 to 2019. The results show that industrial value-added contributes to economic development when a positive shock occurs but has the opposite impact when a negative shock occurs. Technology innovation is also a good factor in achieving economic development, whether the shock is positive or negative. Short- and long-term impacts of FDI and financial innovation rents are neutral when a positive shock occurs but negative when an unfavorable shock occurs. The short-term/long-term difference is now more stable with the addition of the error correction term. A novel equilibrium equation shown via symmetric multiplier graphs may represent asymmetrical adjustments to economic growth in response to positive and negative shocks. Proposals based on results urge the government and policymakers to focus on heavy and secondary sectors, policies that rely heavily on technology, and the use of renewable resources.
Similar content being viewed by others
References
Acheampong AO, Adams S, Boateng E (2019) Do globalization and renewable energy contribute to carbon emissions mitigation in Sub-Saharan Africa? Sci Total Environ 677:436–446
Asif M et al (2020) Dynamic interaction between financial development and natural resources: evaluating the ‘resource curse’ hypothesis. Resour Policy 65:101566
Baldassarre Di, Giuliano FL, Montanari A (2009) Design flood estimation using model selection criteria. Phys Chem Earth 34(10–12):606–611
Bhatia SK et al (2019) Carbon dioxide capture and bioenergy production using biological system—a review. Renew Sustain Energy Rev 110:143–158
Bogacheva OV, Smorodinov OV (2017) Challenges to green finance in G20 countries. World Econ Int Relat 61(10):16–24
Cantwell J (2017) Innovation and international business. Ind Innov 24(1):41–60
Cao S et al (2021) Digital finance, green technological innovation and energy-environmental performance: evidence from China’s regional economies. J Clean Prod 327:129458
Chang L, Quan Lu, Ali S, Mohsin M (2022) How does hydropower energy asymmetrically affect environmental quality? Evidence from quantile-based econometric estimation. Sustain Energy Technol Assess 53:102564
Cui X, Umair M, Gayratovich GI, Dilanchiev A (2023) DO remittances mitigate poverty? AN empirical evidence from 15 selected Asian economies. Singap Econ Rev (SER) 68(04):1447–1468. https://doi.org/10.1142/S0217590823440034
Ding C, Liu C, Zheng C, Li F (2022) Digital economy, technological innovation and high-quality economic development: based on spatial effect and mediation effect. Sustainability 14(1):216
Dobrodolac M, Lazarević D, Švadlenka L, Živanović M (2016) A study on the competitive strategy of the universal postal service provider. Technol Anal Strateg Manag 28(8):935–949
Fang CR, You SY (2014) The impact of oil price shocks on the large emerging countries’ stock prices: evidence from China, India and Russia. Int Rev Econ Finance 29:330–338
Faria-e-Castro M (2018) Fiscal multipliers and financial crises. Working Paper Series (No. 2018-023)
Ferreira JJ, Fernandes CI, Veiga PM (2023) The role of entrepreneurial ecosystems in the SME internationalization. J Bus Res 157:113603
Granoff I, Ryan Hogarth J, Miller A (2016) Nested barriers to low-carbon infrastructure investment. Nat Clim Change 6(12):1065–1071
Ivanov D, Dolgui A (2021) OR-methods for coping with the ripple effect in supply chains during COVID-19 pandemic: managerial insights and research implications. Int J Prod Econ 232:107921
Koitsiwe K, Adachi T (2015) Relationship between mining revenue, government consumption, exchange rate and economic growth in botswana. Contad Admin 60:133–148
Lange L et al (2021) Developing a sustainable and circular bio-based economy in EU: by partnering across sectors, upscaling and using new knowledge faster, and for the benefit of climate, environment & biodiversity, and people & business. Front Bioeng Biotechnol 8:1456
Lee JW (2013) The contribution of foreign direct investment to clean energy use, carbon emissions and economic growth. Energy Policy 55:483–489
Li C et al (2022) The role of green finance and energy innovation in neutralizing environmental pollution: empirical evidence from the MINT economies. J Environ Manag 317:115500
Li C, Umair M (2023a) Does green finance development goals affects renewable energy in China. Renew Energy 203:898–905
Li L, Baijun Wu, Patwary AK (2022a) How marine tourism promote financial development in sustainable economy: new evidences from South Asia and implications to future tourism students. Environ Sci Pollut Res 29(1):1155–1172
Li W et al (2022b) The nexus between COVID-19 fear and stock market volatility. Econ Res Ekon Istraž 35(1):1765–1785. https://doi.org/10.1080/1331677X.2021.1914125
Li Y, Umair M (2023b) The protective nature of gold during times of oil price volatility: an analysis of the COVID-19 pandemic. Extract Ind Soc 15:101284
Liu F, Umair M, Gao J (2023) Assessing oil price volatility co-movement with stock market volatility through quantile regression approach. Resour Policy 81:103375
Liu H (2022) Preparation and performance evaluation of small molecule ammonium salt inhibitors synthesized from mixed amines. Highlights Sci Eng Technol 2:112–119
Liu S, Hou P, Gao Y, Tan Y (2022) Innovation and green total factor productivity in China: a linear and nonlinear investigation. Environ Sci Pollut Res 29(9):12810–12831
Long R et al (2020) Research on the measurement, evolution, and driving factors of green innovation efficiency in yangtze river economic belt: a super-SBM and spatial Durbin model. Complexity 2020:1–14
Miao Z, Baležentis T, Shao S, Chang D (2019) Energy use, industrial soot and vehicle exhaust pollution—China’s regional air pollution recognition, performance decomposition and governance. Energy Econ 83:501–514
Muhammad M, Azer D, Muhammad U (2023) The impact of green climate fund portfolio structure on green finance: empirical evidence from EU countries. Ekonomika 102(2):130–144
Mohsin M et al (2021) Nexus between energy efficiency and electricity reforms: a DEA-based way forward for clean power development. Energy Policy 149:112052
Oh H, Reis R (2012) Targeted transfers and the fiscal response to the great recession. J Monet Econ 59:S50–S64
Pan X et al (2020) Influence of FDI quality on energy efficiency in china based on seemingly unrelated regression method. Energy 192:116463
Petrović-Ranđelović M et al (2020) Economic growth and carbon emissions: evidence from CIVETS countries. Appl Econ 52(16):1806–1815
Shao X, Zhong Y, Liu W, Li RYM (2021) Modeling the effect of green technology innovation and renewable energy on carbon neutrality in N-11 countries? Evidence from advance panel estimations. J Environ Manag 296:113189
Taghizadeh-Hesary F, Rasoulinezhad E, Yoshino N (2019) Energy and food security: linkages through price volatility. Energy Policy 128:796–806
Torma G, Aschemann-Witzel J (2023) Social acceptance of dual land use approaches: stakeholders’ perceptions of the drivers and barriers confronting agrivoltaics diffusion. J Rural Stud 97:610–625
Umair M, Dilanchiev A (2022) Economic recovery by developing business starategies: mediating role of financing and organizational culture in small and medium businesses. Proc Book 683
Vilkaite-Vaitone N, Skackauskiene I (2019) Green marketing orientation: evolution, conceptualization and potential benefits. Open Econ 2(1):53–62
Wan Q, Qian J, Baghirli A, Aghayev A (2022) Green finance and carbon reduction: implications for green recovery. Econ Anal Policy 76:901–913
Wang C et al (2021a) Global financial crisis, smart lockdown strategies, and the COVID-19 spillover impacts: a global perspective implications from Southeast Asia. Front Psychiatry 12:643783
Wang Y, Wang Z, Zameer H (2021b) Structural characteristics and evolution of the ‘international trade-carbon emissions’ network in equipment manufacturing industry: international evidence in the perspective of global value chains. Environ Sci Pollut Res 28(20):25886–25905
Weber JG (2020) How should we think about environmental policy and jobs? An analogy with trade policy and an illustration from U.S. coal mining. Rev Environl Econ Policy 14(1):44–66
Wu Q, Yan D, Umair Md (2023) Assessing the role of competitive intelligence and practices of dynamic capabilities in business accommodation of SMEs. Econ Anal Policy 77:1103–1114
Wu X et al (2021) Testing role of green financing on climate change mitigation: evidences from G7 and E7 countries. Environ Sci Pollut Res 28(47):66736–66750
Xiao H et al (2021) The governance-production nexus of eco-efficiency in chinese resource-based cities: a two-stage network DEA approach. Energy Econ 101:105408
Xiuzhen X, Zheng W, Umair M (2022) Testing the fluctuations of oil resource price volatility: a hurdle for economic recovery. Resour Policy 79:102982
Xu S, Qamruzzaman Md, Adow AH (2021) Is financial innovation bestowed or a curse for economic sustainably: the mediating role of economic policy uncertainty. Sustainability 13(4):1–18
Yang H et al (2021) Multi-region and multi-sector comparisons and analysis of industrial carbon productivity in China. J Clean Prod 279:123623
Yoon KH, Ratti RA (2011) Energy price uncertainty, energy intensity and firm investment. Energy Econ 33(1):67–78
Yu M, Umair M, Oskenbayev Y, Karabayeva Z (2023) Exploring the nexus between monetary uncertainty and volatility in global crude oil: a contemporary approach of regime-switching. Resour Policy 85:103886
Yuan H, Zhao L, Umair M (2023) Crude oil security in a turbulent world: China’s geopolitical dilemmas and opportunities. Extract Ind Soc 16:101334
Yue Y, Tian L, Yue Q, Wang Z (2020) Spatiotemporal variations in energy consumption and their influencing factors in china based on the integration of the DMSP-OLS and NPP-VIIRS nighttime light datasets. Remote Sens 12(7):1151
Zhang Y, Umair M (2023) Examining the interconnectedness of green finance: an analysis of dynamic spillover effects among green bonds, renewable energy, and carbon markets. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-023-27870-w
Zivot E, Andrews DWK (2002) Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. J Bus Econ Stat 20(1):25–44. https://doi.org/10.1198/073500102753410372
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflict of interest.
Ethical approval
Not applicable.
Consent to participate
Not applicable.
Consent for publication
Not applicable.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Liang, J., Li, G. The role of green financing in enabling sustainable energy transition and economic development. Econ Change Restruct 57, 108 (2024). https://doi.org/10.1007/s10644-024-09639-4
Received:
Accepted:
Published:
DOI: https://doi.org/10.1007/s10644-024-09639-4