GREEN FINANCE AND ECONOMIC GROWTH IN NIGERIA
Keywords:
Green Energy, Green Finance, Gross Domestic Product, Carbon Finance
Abstract
This study on the impact of transportation on the influence of green finance on economic growth in Nigeria. Annual time series data on the values of governments investments in green energy, carbon finance, GDP, and government carbon credit were used for the ARDL model of regression analysis. The study conducted descriptive statistics, unit root test using ADF, Bounds Test for Cointegration, ARDL-ECM analysis. Other post-estimation analysis conducted include serial autocorrelation, and heteroskedasticity tests. It was found that Government Green Investment (Prob = 0.9471), and Green Credit (Prob = 0.5047) have negative and insignificant relationship with gross domestic growth rate (GDPGR) while Carbon Finance (CAF) (Prob=0.3601) has positive but insignificant relationship with GDPGR. The study concludes that green finance has no significant influence on the GDPGR in Nigeria over the period. It is recommended that policies relating to green finance in Nigeria must be reevaluated to ensure that they contribute to the growth of the economy and not vice versa.
Downloads
Download data is not yet available.
References
Berensmann, K., & Lindenberg, N. (2019). Green finance: Across the universe. In Corporate Social Responsibility, Ethics and Sustainable Prosperity (pp. 305-332). Beijing.
Cao, L. (2023). How green finance reduces CO2 emissions for green economic recovery: Empirical evidence from E7 economies. Environmental Science and Pollution Research, 30(2), 3307-3320.
Chen, C., Zhang, Y., Bai, Y., & Li, W. (2021). The impact of green credit on economic growth: The mediating effect of environment on labor supply. PLoS One, 16(9), e0257612
Chin, M. Y., Ong, S. L., Ooi, D. B. Y., & Puah, C. H. (2024). The impact of green finance on environmental degradation in BRI region. Environment, Development and Sustainability, 26(1), 303-318.
Dabyltayeva, N., & Rakhymzhan, G. (2019). The green economy development path: Overview of economic policy priorities. Journal of Security and Sustainability Issues, 8(4), 643–651.
Diamond, D. W. (1991). Debt Maturity Structure and Liquidity Risk. The Quarterly Journal of Economics, 106, 709-737. https://doi.org/10.2307/2937924
Fan, W., & Zhang, C. (2024). Does green finance affect economic performance? Growth and crowding-out consequences. Emerging Markets Finance and Trade, 1-21.
Gao, J., Wu, D., Xiao, Q., Randhawa, A., Liu, Q., & Zhang, T. (2023). Green finance, environmental pollution and high-quality economic development—a study based on China’s provincial panel data. Environmental Science and Pollution Research, 30(11), 31954-31976.
Guild, J. (2020). The political and institutional constraints on green finance in Indonesia. Journal of Sustainable Finance & Investment, 10(2), 157-170.
Haiyang, Q. (2017). Research on the economic growth effect of green finance. Economic Research Reference, 38, 53–59.
Hanh, H. M. (2016). Green finance for economic growth and sustainable development in Vietnam. Available at http://210.245.26.173:6788/tapchi/Uploads/Ho_20Hanh_20My_20T8_2016.pdf
He, L., Zhang, L., Zhong, Z., Wang, D., & Wang, F. (2019). Green credit, renewable energy investment and green economy development: Empirical analysis based on 150 listed companies of China. Journal of cleaner production, 208, 363-372.
Hienrich Boll Stiftung (2022). Nigeria’s green bond programme: Aspirations, realities and solutions. Available at https://ng.boell.org/sites/default/files/2022-02/Nigeria%E2%80%99s%20Green%20Bond%20Programme2022Report.pdf
Ijirshar, V. U. (2019). Impact of trade openness on economic growth among ECOWAS countries: 1975-2017. Journal of Applied Statistics, 10(1), 75–96.
Lee, C. C., Wang, F., & Chang, Y. F. (2023). Does green finance promote renewable energy? Evidence from China. Resources Policy, 82, 103439.
Li, B. Y., & Huang, J. G. (2023). Research on the mechanism of green finance serving the real economy under the background of Chinese modernization. Open Access Library Journal, 10, e10967.
Nenavath, S., & Mishra, S. (2023). Impact of green finance and fintech on sustainable economic growth: Empirical evidence from India. Heliyon, 23, e16301.
Okediya, P. (2023). Governance, climate change and finance: The Nigerian perspective. Available at https://deliverypdf.ssrn.com/delivery.php?
Oshodi, B. A. (2018). Analysis of macroeconomic indicators on economic growth: Empirical studies of Nigeria and China https://ssrn.com/abstract=3358697
Ozili, P. K. (2021). Digital Finance, Green Finance and Social Finance: Is thera a Link? Financial Internet Quarterly, 17(1), 1-7.
Ozili, P. K. (2022). Green finance research around the world: A review of literature. Available at https: doi:10.1504/IJGE.2022.10048432
Qian, S., & Yu, W. (2024). Green finance and environmental, social, and governance performance. International Review of Economics & Finance, 89, 1185-1202.
Rajan, R.G. (1992) Insiders and outsiders: The Choice between informed and arm’s length debt. Journal of Finance, 47, 1367-1400. http://dx.doi.org/10.1111/j.1540-6261.1992.tb04662.x
Romer, P. M. (1990). The origins of endogenous growth. Journal of Economic perspectives, 8(1), 3-22.
Solow, R. (1956), A contribution to the theory of economic growth. Quarterly Journal of Economics, 70, 65–94.
Taghizadeh-Hesary, F., & Yoshino, N. (2019). The way to induce private participation in green finance and investment. Financial Resolution Letter, 31, 98–103.
Udeaja, A. E & Obi, K. O (2015) Determinants of economic growth in Nigeria: Evidence from error correction model approach. Developing Country Studies, 5(9), 201-222.
Wang, Y, & Zhi, Q. (2016). The role of green finance in environmental protection: Two aspects of market mechanism and policies. Energy Procedia, 104, 311–316.
Wang, K., Tsai, S., Du, X., & Bi, D. (2019). Internet finance, green finance, and sustainability. Sustainability-Basel, 11, 3856.
Wang, Z., Peng, M. Y. P., Anser, M. K., & Chen, Z. (2023). Research on the impact of green finance and renewable energy on energy efficiency: The case study E− 7 economies. Renewable Energy, 205, 166-173.
Wu, H. (2023). Evaluating the role of renewable energy investment resources and green finance on the economic performance: Evidence from OECD economies. Resources Policy, 80, 103149.
Xu, S., & Dong, H. (2023). Green finance, industrial structure upgrading, and high-quality economic development–intermediation model based on the regulatory role of environmental regulation. International Journal of Environmental Research and Public Health, 20(2), 1420.
Xu, J., She, S., Gao, P., & Sun, Y. (2023). Role of green finance in resource efficiency and green economic growth. Resources Policy, 81, 103349.
Zakari, A., Oryani, B., Alvarado, R., & Mumini, K. (2023). Assessing the impact of green energy and finance on environmental performance in China and Japan. Economic Change and Restructuring, 56(2), 1185-1199.
Zhang, D., Zhang, Z., & Managi, S. (2019). A bibliometric analysis on green finance: current status, development, and future directions. Finance Research Letters, 29, 425–430.
Cao, L. (2023). How green finance reduces CO2 emissions for green economic recovery: Empirical evidence from E7 economies. Environmental Science and Pollution Research, 30(2), 3307-3320.
Chen, C., Zhang, Y., Bai, Y., & Li, W. (2021). The impact of green credit on economic growth: The mediating effect of environment on labor supply. PLoS One, 16(9), e0257612
Chin, M. Y., Ong, S. L., Ooi, D. B. Y., & Puah, C. H. (2024). The impact of green finance on environmental degradation in BRI region. Environment, Development and Sustainability, 26(1), 303-318.
Dabyltayeva, N., & Rakhymzhan, G. (2019). The green economy development path: Overview of economic policy priorities. Journal of Security and Sustainability Issues, 8(4), 643–651.
Diamond, D. W. (1991). Debt Maturity Structure and Liquidity Risk. The Quarterly Journal of Economics, 106, 709-737. https://doi.org/10.2307/2937924
Fan, W., & Zhang, C. (2024). Does green finance affect economic performance? Growth and crowding-out consequences. Emerging Markets Finance and Trade, 1-21.
Gao, J., Wu, D., Xiao, Q., Randhawa, A., Liu, Q., & Zhang, T. (2023). Green finance, environmental pollution and high-quality economic development—a study based on China’s provincial panel data. Environmental Science and Pollution Research, 30(11), 31954-31976.
Guild, J. (2020). The political and institutional constraints on green finance in Indonesia. Journal of Sustainable Finance & Investment, 10(2), 157-170.
Haiyang, Q. (2017). Research on the economic growth effect of green finance. Economic Research Reference, 38, 53–59.
Hanh, H. M. (2016). Green finance for economic growth and sustainable development in Vietnam. Available at http://210.245.26.173:6788/tapchi/Uploads/Ho_20Hanh_20My_20T8_2016.pdf
He, L., Zhang, L., Zhong, Z., Wang, D., & Wang, F. (2019). Green credit, renewable energy investment and green economy development: Empirical analysis based on 150 listed companies of China. Journal of cleaner production, 208, 363-372.
Hienrich Boll Stiftung (2022). Nigeria’s green bond programme: Aspirations, realities and solutions. Available at https://ng.boell.org/sites/default/files/2022-02/Nigeria%E2%80%99s%20Green%20Bond%20Programme2022Report.pdf
Ijirshar, V. U. (2019). Impact of trade openness on economic growth among ECOWAS countries: 1975-2017. Journal of Applied Statistics, 10(1), 75–96.
Lee, C. C., Wang, F., & Chang, Y. F. (2023). Does green finance promote renewable energy? Evidence from China. Resources Policy, 82, 103439.
Li, B. Y., & Huang, J. G. (2023). Research on the mechanism of green finance serving the real economy under the background of Chinese modernization. Open Access Library Journal, 10, e10967.
Nenavath, S., & Mishra, S. (2023). Impact of green finance and fintech on sustainable economic growth: Empirical evidence from India. Heliyon, 23, e16301.
Okediya, P. (2023). Governance, climate change and finance: The Nigerian perspective. Available at https://deliverypdf.ssrn.com/delivery.php?
Oshodi, B. A. (2018). Analysis of macroeconomic indicators on economic growth: Empirical studies of Nigeria and China https://ssrn.com/abstract=3358697
Ozili, P. K. (2021). Digital Finance, Green Finance and Social Finance: Is thera a Link? Financial Internet Quarterly, 17(1), 1-7.
Ozili, P. K. (2022). Green finance research around the world: A review of literature. Available at https: doi:10.1504/IJGE.2022.10048432
Qian, S., & Yu, W. (2024). Green finance and environmental, social, and governance performance. International Review of Economics & Finance, 89, 1185-1202.
Rajan, R.G. (1992) Insiders and outsiders: The Choice between informed and arm’s length debt. Journal of Finance, 47, 1367-1400. http://dx.doi.org/10.1111/j.1540-6261.1992.tb04662.x
Romer, P. M. (1990). The origins of endogenous growth. Journal of Economic perspectives, 8(1), 3-22.
Solow, R. (1956), A contribution to the theory of economic growth. Quarterly Journal of Economics, 70, 65–94.
Taghizadeh-Hesary, F., & Yoshino, N. (2019). The way to induce private participation in green finance and investment. Financial Resolution Letter, 31, 98–103.
Udeaja, A. E & Obi, K. O (2015) Determinants of economic growth in Nigeria: Evidence from error correction model approach. Developing Country Studies, 5(9), 201-222.
Wang, Y, & Zhi, Q. (2016). The role of green finance in environmental protection: Two aspects of market mechanism and policies. Energy Procedia, 104, 311–316.
Wang, K., Tsai, S., Du, X., & Bi, D. (2019). Internet finance, green finance, and sustainability. Sustainability-Basel, 11, 3856.
Wang, Z., Peng, M. Y. P., Anser, M. K., & Chen, Z. (2023). Research on the impact of green finance and renewable energy on energy efficiency: The case study E− 7 economies. Renewable Energy, 205, 166-173.
Wu, H. (2023). Evaluating the role of renewable energy investment resources and green finance on the economic performance: Evidence from OECD economies. Resources Policy, 80, 103149.
Xu, S., & Dong, H. (2023). Green finance, industrial structure upgrading, and high-quality economic development–intermediation model based on the regulatory role of environmental regulation. International Journal of Environmental Research and Public Health, 20(2), 1420.
Xu, J., She, S., Gao, P., & Sun, Y. (2023). Role of green finance in resource efficiency and green economic growth. Resources Policy, 81, 103349.
Zakari, A., Oryani, B., Alvarado, R., & Mumini, K. (2023). Assessing the impact of green energy and finance on environmental performance in China and Japan. Economic Change and Restructuring, 56(2), 1185-1199.
Zhang, D., Zhang, Z., & Managi, S. (2019). A bibliometric analysis on green finance: current status, development, and future directions. Finance Research Letters, 29, 425–430.
Published
2026-08-28
How to Cite
EMMANUEL UZOMA, M. (2026). GREEN FINANCE AND ECONOMIC GROWTH IN NIGERIA. GPH-International Journal of Applied Management Science, 6(2), 108-124. https://doi.org/10.5281/zenodo.22141899
Section
Articles
Copyright (c) 2026 GPH-International Journal of Applied Management Science
Author(s) and co-author(s) jointly and severally represent and warrant that the Article is original with the author(s) and does not infringe any copyright or violate any other right of any third parties, and that the Article has not been published elsewhere. Author(s) agree to the terms that the GPH Journal will have the full right to remove the published article on any misconduct found in the published article.
