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Role of financial inclusion and export diversification in determining green growth: evidence from SAARC economies

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Abstract

This study quantifies the impact of financial inclusion and export diversification in attaining the target of green growth for SAARC economies during the period 2000 to 2019. For the analysis purpose, this study employed second-generation econometric techniques that deal with heterogeneity and cross-sectional dependence issues. To this end, CUP-FM and CUP-BC are used to investigate the long-run dynamic equilibrium relationship among the variables of interest. The outcomes show that financial inclusion and institutional quality are eco-friendly variables and play a vital role in attaining green growth. In contrast, export diversification and FDI are inversely related with green growth in SAARC economies. Furthermore, a unidirectional causality running from financial inclusion to green growth and financial inclusion to export diversification is observed. On the basis of investigated outcomes, this research suggests essential policy recommendations to attain green growth.

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Data availability

The datasets used in the current study are available in the World Bank repository (https://data.worldbank.org/ indicator).

Notes

  1. United Nation Development Program.

  2. United Nations Economic and Social Commission for Asia and the Pacific.

  3. Bangladesh, Pakistan, India, Sri Lanka, Bhutan, and Maldives.

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Authors and Affiliations

  1. Department of Economics, Lahore College for Women University, Lahore, Punjab, Pakistan

    Ramsha Saleem & Samia Nasreen

  2. Government Associate College for Women, Eminabad, Gujranwala, Punjab, Pakistan

    Sidrah Azam

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  1. Ramsha Saleem
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  2. Samia Nasreen
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  3. Sidrah Azam
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Contributions

RS conceptualized the research. SA sought the data and SN undertook formal analysis. RS and SA prepared the initial draft. Review and editing is also done by RS and SN. All the authors read and approved the final manuscript.

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Correspondence to Samia Nasreen.

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Appendix

Appendix

Tables 8, 9.

Table 8 PCA for financial inclusion index
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Table 9 PCA for institutional quality index
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Saleem, R., Nasreen, S. & Azam, S. Role of financial inclusion and export diversification in determining green growth: evidence from SAARC economies. Environ Sci Pollut Res 29, 60327–60340 (2022). https://doi.org/10.1007/s11356-022-20096-2

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