Skip to main content
SpringerLink
Log in

Can green finance, green technologies, and environmental policy stringency leverage sustainability in China: evidence from quantile-ARDL estimation

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

Environmental sustainability is an umbrella approach depending on various climatic and economic policies. In doing so, the current study empirically evaluates the role of green finance, eco-innovation, and environmental policy stringency on the ecological footprint in China. To meet the objectives, the novel quantile autoregressive distributed lag (QARDL) approach was employed from 2000 to 2017. The outcomes reveal heterogeneous associations between the proposed variables. Manifestly, the QARDL estimation results demonstrate a positive impact between eco-innovation, green finance, and environmental policy stringency with the ecological footprints of China; however, the extent of the relationship is quantile dependent. The outcomes are further validated through the Wald test of parameter constancy. The bi-direction causality is observed among all variables at several quantiles. The current study offers policymakers helpful suggestions on enhancing the positive effects of environmentally supported innovation, green finance, and stringent environmental policies on the ecosystem.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Source: Global Footprint Network

Fig. 2

Source: The CityUk analysis based on data of Refinitive workshop

Fig. 3

Source: Statista

Fig. 4

Source: Demiral et al. (2021)

Similar content being viewed by others

Data availability

Data will be available upon the request to corresponding author.

References

  • Afshan S, Yaqoob T (2022) The potency of eco-innovation, natural resource and financial development on ecological footprint: quantile-ARDL based evidence from China. Environ Sci Pollut Res, 1-11

  • Afshan S, Ozturk I, Yaqoob T (2022) Facilitating renewable energy transition, ecological innovations and stringent environmental policies to improve ecological sustainability: evidence from MM-QR method. Renewable Energy 196:151–160. https://doi.org/10.1016/j.renene.2022.06.125

    Article  Google Scholar 

  • Ahmad M (2021) Nonlinear dynamics of innovation activities over the business cycles: empirical evidence from OECD economies. Technol Soc 67:101721

    Google Scholar 

  • Ahmad M, Jiang P, Murshed M, Shehzad K, Akram R, Cui L, Khan Z (2021) Modelling the dynamic linkages between eco-innovation, urbanization, economic growth and ecological footprints for G7 countries: does financial globalization matter? Sustain Cities Soc 70:102881

    Google Scholar 

  • Ahmed Z, Asghar MM, Malik MN, Nawaz K (2020) Moving towards a sustainable environment: the dynamic linkage between natural resources, human capital, urbanization, economic growth, and ecological footprint in China. Resour Policy 67:101677

    Google Scholar 

  • Akadiri SS, Adebayo TS, Asuzu OC, Onuogu IC, Oji-Okoro I (2022) Testing the role of economic complexity on the ecological footprint in China: a nonparametric causality-in-quantiles approach. Energy Environ, 0958305X221094573

  • Ali K, Bakhsh S, Ullah S, Ullah A, Ullah S (2021) Industrial growth and CO2 emissions in Vietnam: the key role of financial development and fossil fuel consumption. Environ Sci Pollut Res 28(6):7515–7527

    CAS  Google Scholar 

  • Ali K, Jianguo D, Kirikkaleli D (2022) Modeling the natural resources and financial inclusion on ecological footprint: the role of economic governance institutions Evidence from ECOWAS economies. Resour Policy 79:103115

    Google Scholar 

  • Ali R, Rehman MA, Rehman RU, Ntim CG (2022) Sustainable environment, energy and finance in China: evidence from dynamic modelling using carbon emissions and ecological footprints. Environ Sci Pollut Res 29(52):79095–79110

    Google Scholar 

  • Ali M, Seraj M (2022) Nexus between energy consumption and carbon dioxide emission: evidence from 10 highest fossil fuel and 10 highest renewable energy-using economies. Environ Sci Pollut Res 29(58):87901–87922

    CAS  Google Scholar 

  • Ali M, Tursoy T, Samour A, Moyo D, Konneh A (2022) Testing the impact of the gold price, oil price, and renewable energy on carbon emissions in South Africa: Novel evidence from bootstrap ARDL and NARDL approaches. Resour Policy 79:102984

    Google Scholar 

  • Alola AA, Adebayo TS, Onifade ST (2022) Examining the dynamics of ecological footprint in China with spectral Granger causality and quantile-on-quantile approaches. Intl J Sustain Dev World Ecol 29(3):263–276

    Google Scholar 

  • Aydin M, Turan YE (2020) The influence of financial openness, trade openness, and energy intensity on ecological footprint: revisiting the environmental Kuznets curve hypothesis for BRICS countries. Environ Sci Pollut Res 27(34):43233–43245

    Google Scholar 

  • Baloch MA, Wang B (2019) Analyzing the role of governance in CO2 emissions mitigation: the BRICS experience. Struct Change Econ Dynam 51:119–125

    Google Scholar 

  • Bibi A, Zhang X, Umar M (2021) The imperativeness of biomass energy consumption to the environmental sustainability of the United States revisited. Environ Ecol Stat 28(4):821–841

    Google Scholar 

  • Burek J, Bauer C, Kirchain R, Moore E, Gregory J, Norris G (2022) Assessing handprint potentials for business’s eco-innovation. Sustain Prod Consumpt 29:201–214

    Google Scholar 

  • Chen X, Chen Z (2021) Can green finance development reduce carbon emissions? Empirical evidence from 30 Chinese provinces. Sustainability 13(21):12137

    CAS  Google Scholar 

  • Chien F, Sadiq M, Nawaz MA, Hussain MS, Tran TD, Le Thanh T (2021) A step toward reducing air pollution in top Asian economies: the role of green energy, eco-innovation, and environmental taxes. J Environ Manag 297:113420

    CAS  Google Scholar 

  • China Population (2022) - Worldometer. (2022). Retrieved 6 April 2022, from https://www.worldometers.info/world-population/china-

  • Cho JS, Kim TH, Shin Y (2015) Quantile cointegration in the autoregressive distributed-lag modeling framework. J Econometr 188(1):281–300

    Google Scholar 

  • Choi G, Cho SH (2021) Effect of market versus nonmarket environmental policy stringency on knowledge sourcing behavior for green technology: evidence from OECD countries. Review of International Business and Strategy

  • Chu LK, Tran TH (2022) The nexus between environmental regulation and ecological footprint in OECD countries: empirical evidence using panel quantile regression. Environ Sci Pollut Res, 1-24

  • Corrocher N, Mancusi ML (2021) International collaborations in green energy technologies: What is the role of distance in environmental policy stringency? Energy Policy 156:112470

    Google Scholar 

  • Dash DP, Behera SR, Rao DT, Sethi N, Loganathan N (2020) Governance, urbanization, and pollution: a cross-country analysis of global south region. Cogent Economics & Finance 8(1):1742023

    Google Scholar 

  • Demiral M, Akça EE, Tekin I (2021) Predictors of global carbon dioxide emissions: do stringent environmental policies matter? Environ Dev Sustain 23(12):18337–18361

    Google Scholar 

  • Destek MA, Sarkodie SA (2019) Investigation of environmental Kuznets curve for ecological footprint: the role of energy and financial development. Sci Total Environ 650:2483–2489

    CAS  Google Scholar 

  • Dogan E, Ulucak R, Kocak E, Isik C (2020) The use of ecological footprint in estimating the environmental Kuznets curve hypothesis for BRICST by considering cross-section dependence and heterogeneity. Sci Total Environ 723:138063

    CAS  Google Scholar 

  • Engle RF, Granger CW (1987) Co-integration and error correction: representation, estimation, and testing. Econometrica: journal of the Econometric Society, 251-276

  • Falcone PM, Morone P, Sica E (2018) Greening o the financial system and fuelling a sustainability transition: a discursive approach to assessing landscape pressures on the Italian financial system. Technol Forecast Social Change 127:23–37

    Google Scholar 

  • Gani A (2012) The relationship between good governance and carbon dioxide emissions: evidence from developing economies. J Econ Dev 37(1):77

    Google Scholar 

  • Galeotti M, Salini S, Verdolini E (2020) Measuring environmental policy stringency: approaches, validity, and impact on environmental innovation and energy efficiency. Energy Policy 136:111052

    Google Scholar 

  • Geng D, Lai KH, Zhu Q (2021) Eco-innovation and its role in performance improvement among Chinese small and medium-sized manufacturing enterprises. Intl J Prod Econ 231:107869

    Google Scholar 

  • Ghita SI, Saseanu AS, Gogonea RM, Huidumac-Petrescu CE (2018) Perspectives of ecological footprint in European context under the impact of information society and sustainable development. Sustainability 10(9):3224

    Google Scholar 

  • Godil DI, Sarwat S, Sharif A, Jermsittiparsert K (2020) How oil prices, gold prices, uncertainty and risk impact Islamic and conventional stocks? Empirical evidence from QARDL technique. Resour Policy 66:101638

    Google Scholar 

  • Guild J (2020) The political and institutional constraints on green finance in Indonesia. J Sustain Fin Invest 10(2):157–170

    Google Scholar 

  • Güney T (2022) Solar energy, governance and CO2 emissions. Renewable Energy 184:791–798

    Google Scholar 

  • Idrees M, Majeed MT (2022) Income inequality, financial development, and ecological footprint: fresh evidence from an asymmetric analysis. Environ Sci Pollut Res, 1-15

  • Jianguo D, Ali K, Alnori F, Ullah S (2022) The nexus of financial development, technological innovation, institutional quality, and environmental quality: evidence from OECD economies. Environ Sci Pollut Res, 1-22

  • Jin C, Razzaq A, Saleem F, Sinha A (2021) Asymmetric effects of eco-innovation and human capital development in realizing environmental sustainability in China: evidence from quantile ARDL framework. Economic Research-Ekonomska Istraživanja, 1-24

  • Johnston EC, Davenport FV, Wang L, Caers JK, Muthukrishnan S, Burke M, Diffenbaugh NS (2021) Quantifying the effect of precipitation on landslide hazard in urbanized and non‐urbanized areas. Geophysical Research Letters, 48(16), e2021GL094038

  • Joof F, Samour A, Tursoy T, Ali M (2022) Climate change, insurance market, renewable energy, and biodiversity: Double-materiality concept from BRICS countries. Environ Sci Pollut Res, 1-14

  • Kampas A, Czech K, Rozakis S (2021) Do globalisation and environmental policy stringency affect the environmental terms of trade? Evidence from the V4 countries (No. 2021-1)

  • Ke H, Dai S, Yu H (2021) Spatial effect of innovation efficiency on ecological footprint: City-level empirical evidence from China. Environ Technol Innov 22:101536

    Google Scholar 

  • Khan A, Chenggang Y, Hussain J, Bano S (2019) Does energy consumption, financial development, and investment contribute to ecological footprints in BRI regions? Environ Sci Pollut Res 26(36):36952–36966

    Google Scholar 

  • Khan MA, Riaz H, Ahmed M, Saeed A (2021) Does green finance really deliver what is expected? An empirical perspective. Borsa Istanbul Review

  • Kim TH, White H (2003) Estimation, inference, and specification testing for possibly misspecified quantile regression. Emerald Group Publishing Limited

  • Koenker R, Bassett Jr, G (1978) Regression quantiles. Econometrica: journal of the Econometric Society, 33-50

  • Koenker R, Xiao Z (2004) Unit root quantile autoregression inference. J Am Stat Assoc 99(467):775–787

    Google Scholar 

  • Kongbuamai N, Bui Q, Nimsai S (2021) The effects of renewable and nonrenewable energy consumption on the ecological footprint: the role of environmental policy in BRICS countries. Environ Sci Pollut Res 28(22):27885–27899

    Google Scholar 

  • Lahiani A (2018) Revisiting the growth-carbon dioxide emissions nexus in Pakistan. Environ Sci Pollut Res 25(35):35637–35645

    CAS  Google Scholar 

  • Li C, Lin S, Sun Y, Afshan S, Yaqoob T (2022) The asymmetric effect of oil price, news-based uncertainty, and COVID-19 pandemic on equity market. Resour Policy 77:102740

    Google Scholar 

  • Li H, Khattak SI, Ahmad M (2021) Measuring the impact of higher education on environmental pollution: new evidence from thirty provinces in China. Environ Ecol Stat 28(1):187–217

    Google Scholar 

  • Majeed MT, Mazhar M (2019) Financial development and ecological footprint: a global panel data analysis. Pakistan J Commerce Soc Sci (PJCSS) 13(2):487–514

    Google Scholar 

  • Meo MS, Abd Karim MZ (2022) The role of green finance in reducing CO2 emissions: an empirical analysis. Borsa Istanbul Review 22(1):169–178

    Google Scholar 

  • Miller B, Mössner S (2020) Urban sustainability and counter-sustainability: spatial contradictions and conflicts in policy and governance in the Freiburg and Calgary metropolitan regions. Urban Studies 57(11):2241–2262

    Google Scholar 

  • Murshed M (2021) LPG The LPG consumption and environmental Kuznets curve hypothesis in South Asia is time-series ARDL analysis with multiple structural breaks. Environ Sci Pollut Res 28(7):8337–8372

    Google Scholar 

  • Nathaniel SP, Murshed M, Bassim M (2021) The nexus between economic growth, energy use, international trade and ecological footprints: the role of environmental regulations in N11 countries. Energy Ecol Environ 6(6):496–512

    Google Scholar 

  • Nguyen TT, Pham TAT, Tram HTX (2020) Role of information and communication technologies and innovation in driving carbon emissions and economic growth in selected G-20 countries. J Environ Manag 261:110162

    Google Scholar 

  • Pata UK, Caglar AE (2021) Investigating the EKC hypothesis with renewable energy consumption, human capital, globalization and trade openness for China: evidence from augmented ARDL approach with a structural break. Energy 216:119220

    Google Scholar 

  • Pesaran MH, Shin Y (1995) An autoregressive distributed lag modelling approach to cointegration analysis

  • Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econometr 16(3):289–326

    Google Scholar 

  • Qureshi MA, Waseem N, Qureshi JA, Afshan S (2018) Impact of organizational commitment on readiness for change: a case of higher learning institutions of Karachi. J Independent Stud Res 16(1):1–14

    Google Scholar 

  • Rafique MZ, Doğan B, Husain S, Huang S, Shahzad U (2021) Role of economic complexity to induce renewable energy: contextual evidence from G7 and E7 countries. Intl J Green Energy 18(7):745–754

    Google Scholar 

  • Rafique MZ, Fareed Z, Ferraz D, Ikram M, Huang S (2022) Exploring the heterogenous impacts of environmental taxes on environmental footprints: an empirical assessment from developed economies. Energy 238:121753

    Google Scholar 

  • Raheem ID, Tiwari AK, Balsalobre-Lorente D (2020) The role of ICT and financial development in CO2 emissions and economic growth. Environ Sci Pollut Res 27(2):1912–1922

    CAS  Google Scholar 

  • Ren X, Shao Q, Zhong R (2020) Nexus between green finance, non-fossil energy use, and carbon intensity: empirical evidence from China based on a vector error correction model. J Clean Prod 277:122844

    Google Scholar 

  • Sarpong SY, Bein MA (2020) The relationship between good governance and CO2 emissions in oil-and non-oil-producing countries: a dynamic panel study of sub-Saharan Africa. Environ Sci Pollut Res 27(17):21986–22003

    CAS  Google Scholar 

  • Scarpellini S, Valero-Gil J, Moneva JM, Andreaus M (2020) Environmental management capabilities for a “circular eco-innovation.” Business Strat Environ 29(5):1850–1864

    Google Scholar 

  • Sharif A, Afshan S (2018) Does military spending impede income inequality? A comparative study of Pakistan and India. Global Business Review 19(2):257–279

    Google Scholar 

  • Sharif A, Afshan S, Qureshi MA (2019) Idolization and ramification between globalization and ecological footprints: evidence from quantile-on-quantile approach. Environ Sci Pollut Res 26(11):11191–11211

    Google Scholar 

  • Sinha A, Mishra S, Sharif A, Yarovaya L (2021) Does green financing help to improve environmental & social responsibility? Designing SDG framework through advanced quantile modelling. J Environ Manag 292:112751

    Google Scholar 

  • Sohag K, Mariev O, Davidson N (2021) Revising environmental Kuznets curve in Russian regions: role of environmental policy stringency. Environ Sci Pollut Res 28(38):52873–52886

    Google Scholar 

  • Su ZW, Umar M, Kirikkaleli D, Adebayo TS (2021) Role of political risk to achieve carbon neutrality: evidence from Brazil. J Environ Manag 298:113463

    CAS  Google Scholar 

  • Suki NM, Sharif A, Afshan S, Suki NM (2020) Revisiting the Environmental Kuznets Curve in Malaysia: the role of globalization in sustainable environment. J Clean Prod 264:121669

    Google Scholar 

  • Suki NM, Suki NM, Afshan S, Sharif A, Meo MS (2022) The paradigms of technological innovation and renewables as a panacea for sustainable development: a pathway of going green. Renewable Energy 181:1431–1439

    CAS  Google Scholar 

  • Suki NM, Suki NM, Sharif A, Afshan S, Jermsittiparsert K (2022) The role of technology innovation and renewable energy in reducing environmental degradation in Malaysia: a step towards sustainable environment. Renewable Energy 182:245–253

    CAS  Google Scholar 

  • Sun Y, Yesilada F, Andlib Z, Ajaz T (2021) The role of eco-innovation and globalization towards carbon neutrality in the USA. J Environ Manag 299:113568

    CAS  Google Scholar 

  • Tan X, Zhu K, Meng X, Gu B, Wang Y, Meng F, ... Li H (2021) Research on the status and priority needs of developing countries to address climate change. J Clean Prod, 289, 125669

  • Tao R, Umar M, Naseer A, Razi U (2021) The dynamic effect of eco-innovation and environmental taxes on carbon neutrality target in emerging seven (E7) economies. J Environ Manag 299:113525

    Google Scholar 

  • Toebelmann D, Wendler T (2020) The impact of environmental innovation on carbon dioxide emissions. J Clean Prod 244:118787

    CAS  Google Scholar 

  • Troster V, Shahbaz M, Uddin GS (2018) Renewable energy, oil prices, and economic activity: A Granger-causality in quantiles analysis. Energy Economics 70:440–452

    Google Scholar 

  • Uddin GA, Salahuddin M, Alam K, Gow J (2017) Ecological footprint and real income: panel data evidence from the 27 highest emitting countries. Ecological Indicators 77:166–175

    Google Scholar 

  • Udemba EN (2021) Nexus of ecological footprint and foreign direct investment pattern in carbon neutrality: new insight for United Arab Emirates (UAE). Environ Sci Pollut Res 28(26):34367–34385

    Google Scholar 

  • Vennemo H, Aunan K, Lindhjem H, Seip HM (2020) Environmental pollution in China: status and trends

  • Walton S, Zhang A, O’Kane C (2020) Energy eco-innovations for sustainable development: exploring organizational strategic capabilities through an energy cultures framework. Business Strat Environ 29(3):812–826

    Google Scholar 

  • Wang Z, Zhang B, Wang B (2018) The moderating role of corruption between economic growth and CO2 emissions: evidence from BRICS economies. Energy 148:506–513

    Google Scholar 

  • Wang H, Cui H, Zhao Q (2021) Effect of green technology innovation on green total factor productivity in China: Evidence from spatial Durbin model analysis. J Clean Prod 288:125624

    Google Scholar 

  • Wang R, Mirza N, Vasbieva DG, Abbas Q, Xiong D (2020) The nexus of carbon emissions, financial development, renewable energy consumption, and technological innovation: what should be the priorities in light of COP 21 Agreements? J Environ Manag 271:111027

    Google Scholar 

  • Wang K, Yan M, Wang Y, Chang CP (2020) The impact of environmental policy stringency on air quality. Atmos Environ 231:117522

    CAS  Google Scholar 

  • Wang Y, Lei X, Zhao D, Long R, Wu M (2021) The dual impacts of green credit on economy and environment: evidence from China. Sustainability 13(8):4574

    Google Scholar 

  • Wolde-Rufael Y, Mulat-Weldemeskel E (2021) Do environmental taxes and environmental stringency policies reduce CO2 emissions? Evidence from 7 emerging economies. Environ Sci Pollut Res 28(18):22392–22408

    CAS  Google Scholar 

  • Xiao Z (2009) Quantile cointegrating regression. J Econometr 150(2):248–260

    Google Scholar 

  • Yirong Q (2022) Does environmental policy stringency reduce CO2 emissions? Evidence from high-polluted economies. J Clean Prod, 130648

  • Youssef AB, Boubaker S, Omri A (2020) Financial development and macroeconomic sustainability: modeling based on a modified environmental Kuznets curve. Climatic Change 163(2):767–785

    Google Scholar 

  • Zeng S, Li G, Wu S, Dong Z (2022) The impact of green technology innovation on carbon emissions in the context of carbon neutrality in China: evidence from spatial spillover and nonlinear effect analysis. Intl J Environ Res Pub Health 19(2):730

    CAS  Google Scholar 

  • Zeng Y, Wang F, Wu J (2022) The impact of green finance on urban haze pollution in China: a technological innovation perspective. Energies 15(3):801

    Google Scholar 

  • Zhang KC, Wang MW, Altuntaş M, Afshan S (2022) Do energy prices, covid19, and financial uncertainty hinder the environment and social responsibility?. Economic Research-Ekonomska Istraživanja, 1-19

  • Zhu J, Fan C, Shi H, Shi L (2019) Efforts for a circular economy in China: a comprehensive review of policies. J Indust Ecol 23(1):110–118

    Google Scholar 

Download references

Funding

This paper is supported by XMUMRF/2023-C11/ISEM/0040 grant.

Author information

Authors and Affiliations

  1. Department of Economics and Finance, Sunway Business School, Sunway University, Petaling Jaya, Malaysia

    Sahar Afshan

  2. Department of Statistics, University of Karachi, Karachi, Pakistan

    Tanzeela Yaqoob

  3. School of Economics and Management, Xiamen University, Sepang, Malaysia

    Muhammad Saeed Meo

  4. University of Economics and Human Sciences, Warsaw, Poland

    Muhammad Saeed Meo

  5. Graduate School of Business, Universiti Sains Malaysia, Gelugor, Malaysia

    Muhammad Saeed Meo

  6. Department of Business Administration, Iqra University, Karachi, Pakistan

    Bushra Hamid

Authors
  1. Sahar Afshan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Tanzeela Yaqoob
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Muhammad Saeed Meo
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Bushra Hamid
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

We acknowledge that all the authors participated equally in this paper. Sahar Afshan worked on introduction. Tanzeela Yaqoob worked on analysis and grammar. Muhammad Saeed Meo worked on interpretation and policy recommendation. Bushra Hamid worked on conclusion, policies, and grammar.

Corresponding author

Correspondence to Muhammad Saeed Meo.

Ethics declarations

Ethical approval

We verify that we have followed all the ethical standard for the publication.

Consent to participate

Not applicable

Consent for publication

We are all agree to get publish this paper in ESPR.

Competing interests

The authors declare no competing interests.

Additional information

Responsible Editor: Eyup Dogan

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.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Afshan, S., Yaqoob, T., Meo, M.S. et al. Can green finance, green technologies, and environmental policy stringency leverage sustainability in China: evidence from quantile-ARDL estimation. Environ Sci Pollut Res 30, 61726–61740 (2023). https://doi.org/10.1007/s11356-023-26346-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-023-26346-1

Keywords

Search

Navigation