The Impact of Green Finance on Environmental Quality in Southeast Asian Countries

Abstract

Purpose: To examine the impact of green finance and socio-economic factors on environmental quality in Southeast Asian countries during the period 2015-2024, with environmental quality measured by per-capita CO2 emissions.
Design/methodology/approach: The study employs panel data for Southeast Asian countries from 2015 to 2024 and applies Bayesian estimation methods to evaluate the relationship between green finance, socio-economic control variables, and CO2 emissions.
Findings: The results indicate that green finance does not show a statistically clear impact on CO2 emissions. Regarding the control variables, economic growth tends to increase CO2 emissions, while population and foreign direct investment (FDI) are found to reduce emissions.
Originality/value: This study provides empirical evidence on the role of green finance in the Southeast Asian context and highlights that the effectiveness of green finance policies depends on institutional quality and sustainable development orientation, thereby offering useful implications for environmental and green finance policymaking in the region.