Humboldt-Universität zu Berlin - High Dimensional Nonstationary Time Series

IRTG1792DP2021 017

Green financial development improving energy efficiency and economic growth: a
study of CPEC area in COVID-19 era

Linyun Zhang
Feiming Huang
Lu Lu
Xinwen Ni

This study seeks to evaluate the effect of green financial development,
improving energy efficiency and economic growth on Covid-19 tenure. For this,
the CPEC area is recommended to look into. Present study revealed the energy
economic negative repercussions of Covid-19 impacts. It is assumed that, in
China and Pakistan, economic expansion, trade openness, financial development,
and urbanization coexist. To verify the postulated impacts of economic activity
on the environment, we do Johansen cointegration, error correction, and Granger
causality tests. We discovered that economic growth, energy consumption, trade
openness, financial development, and urbanization had a long-term relationship
to CO2 emissions in Pakistan. Urbanization is the only macroeconomic factor with
a detrimental effect on carbon emissions. As with China, no cointegration is
found across variables, but unidirectional causality from energy consumption and
economic growth to economic growth is established. Economic growth, energy
consumption, and trade openness also each have bidirectional causal effect on
financial development. According to statistical data, along with significant
projected economic development in CPEC countries, policymakers and regulators
are urged to strengthen environmental protection laws in China and Pakistan.

Green financial development, Energy Financing, Energy Efficiency, Economic
growth, Covid-19 crises, Capital formation

JEL Classification: