Search results

The study examines the impact of behavioral biases, such as herd behavior, overconfidence and reactions to ESG News, on Socially Responsible Investing (SRI) decisions in the Indian context. Additionally, it explores gender differences in SRI decisions, thereby deepening the understanding of the factors shaping SRI choices and their implications for sustainable finance and gender-inclusive investment strategies.

The study employs Bayesian linear regression to analyze the impact of behavioral biases on SRI decisions among Indian investors since it accommodates uncertainties and integrates prior knowledge into the analysis. Posterior distributions are determined using the Markov chain Monte Carlo technique, ensuring robust and reliable results.

The presence of behavioral biases presents challenges and opportunities in the financial sector, hindering investors’ SRI engagement but offering valuable opportunities for targeted interventions. Peer advice and hot stocks strongly predict SRI engagement, indicating external influences. Investors reacting to extreme ESG events increasingly integrate sustainability into investment decisions. Gender differences reveal a greater inclination of women towards SRI in India.

The sample size was relatively small and restricted to a specific geographic region, which may limit the generalizability of the findings to other areas. While efforts were made to select a diverse sample, the results may represent something different than the broader population. The research focused solely on individual investors and did not consider the perspectives of institutional investors or other stakeholders in the SRI industry.

The study's practical implications are twofold. First, knowing how behavioral biases, such as herd behavior, overconfidence, and reactions to ESG news, affect SRI decisions can help investors and managers make better and more sustainable investment decisions. To reduce biases and encourage responsible investing, strategies might be created. In addition, the discovery of gender differences in SRI decisions, with women showing a stronger propensity, emphasizes the need for targeted marketing and communication strategies to promote more engagement in sustainable finance. These implications provide valuable insights for investors, managers, and policymakers seeking to advance sustainable investment practices.

The study has important social implications. It offers insights into the factors influencing individuals' SRI decisions, contributing to greater awareness and responsible investment practices. The gender disparities found in the study serve as a reminder of the importance of inclusivity in sustainable finance to promote balanced and equitable participation. Addressing these disparities can empower individuals of both genders to contribute to positive social and environmental change. Overall, the study encourages responsible investing and has a beneficial social impact by working towards a more sustainable and socially conscious financial system.

This study addresses a significant research gap by employing Bayesian linear regression method to examine the impact of behavioral biases on SRI decisions thereby offering more meaningful results compared to conventional frequentist estimation. Furthermore, the integration of behavioral finance with sustainable finance offers novel perspectives, contributing to the understanding of investors, investment managers, and policymakers, therefore, catalyzing responsible capital allocation. The study's exploration of gender dynamics adds a new dimension to the existing research on SRI and behavioral finance.

This paper aims to examine the dynamic relationship between economic growth and sustainable development, integrating the Environmental Kuznets Curve (EKC) in 22 Organization of Islamic Cooperation (OIC) member countries across income groups.

Using annual data between 1990 and 2022, the authors apply the cross-correlation coefficient (CCC) approach of Narayan et al. (Economic Modeling, 2016, 53, 388–397) to examine the lead/lag relationship between GDP per capita and sustainable development. This study further validates the findings through a panel Granger causality test and a fixed panel regression model.

This research provides evidence of a U-shaped EKC for only 1 out of 22 (5%) OIC countries. For 13 out of the 22 (59%) OIC countries, increasing income growth is expected to enhance sustainable development in the future. The results show that as income levels rise, there will be a more significant decline in sustainable development for high-income OIC countries in the future than for both middle-income groups, contradicting the EKC hypothesis. The findings from the panel Granger causality and panel regression models also support the CCC results.

This study proposes a reverse version of the EKC hypothesis and contributes to the literature on economic growth and environmental sustainability. With increasing economic growth, the results can assist OIC member governments and policy-makers in designing tailored policies and practical measures for future sustainable development.

Purpose: The chapter analyses the diversity of the European Union (EU) member states in terms of the transition to a sustainable, green, and just economy.

Need for the study: Sustainable development is an important concern that the EU approaches by aiming to transition to a greener economy, fairly and inclusively. Moreover, the actual context, post-pandemic period and ongoing war at the EU border, makes the social and economic development of the EU countries matter even more in the light of this just transition.

Methodology: The authors relied on a multidimensional approach, using principal component analysis (PCA) to reduce the dimensionality of the dataset. The cluster analysis allowed us to group the countries in such a way that made it possible to identify the best and worst performers, as well as certain patterns that can be the basis for the formulation of good practices and transferable to the states that need more support in the transition to a green economy.

Findings: The results indicated that EU member states can be grouped into five clusters, each needing specific policies to ensure sustainable and inclusive development. Denmark, Finland, and Sweden turned out the best performers, while Estonia, Lithuania, Bulgaria, and Romania proved to have the most unfavourable situation.

Practical implications: The findings provide relevant policy implication insights for policy decision-makers in the field of green economy, economic development, and social policies, with directions for future research.

Given the importance of green finance in a discussion of energy efficiency and clean energy, it is critical to evaluate its implications for the growth of renewable energy. This study examines the impact of green finance on renewable energy development in Singapore.

The dynamic ordinary least squares (DOLS) regression was used in this work to test such a connection.

Using the DOLS for the period 2000–2020, it was discovered that green finance aids renewable energy development in Singapore. Additionally, the findings revealed that economic growth, oil prices, energy consumption, carbon dioxide emissions and institutional factors are all positively associated with renewable energy growth, resulting in a boost in renewable energy development.

Hence, as a result, the monetary authorities of Singapore, such as financial institutions, non-governmental organisations and corporations, should prioritise renewable energy projects under green finance initiatives to boost renewable energy growth. This may assist in raising investment flows to green projects; hence, accelerating the adoption of renewable energy.

Increased Singapore's initiatives to accelerate green finance have prompted this study to examine the research question of whether green finance has a significant impact on renewable energy growth. Thus, to the best of the authors’ knowledge, this will be the first empirical study to explore the impact of green finance on renewable energy growth in the case of Singapore.

Introduction: The global financial crisis has affected the financial markets and has had social consequences in addition to economic ones. The concept of ‘sustainability’ concerns firms reaching their main corporate goals. So, to maximise corporate financial performance (FINP), firms pay attention to non-financial data, such as elements of governance, social, and environmental concerns (henceforth referred to as ESG). Therefore, non-financial information provided by EGS factors measured by the ESG score has a crucial role in incorporating strategy and firm performance.

Purpose: This chapter looks at how ESG scores affect the performance of firms. The term ‘ESG’ describes how corporate operations include ESG principles. The ESG score is a novel way to gauge a company’s sustainability.

Methodology: ESG practices are a current phenomenon that has taken the attention of researchers in the last decades. Besides the amount of research conducted, researchers still need consensus regarding its impact. This chapter implements a systematic literature review to compile the research on ESG performance (ESGP) and how it affects business performance.

Findings: Businesses can incorporate sustainability practices into their operations with the help of ESG reports. ESG reports and scores provide non-financial information, which is crucial for businesses to achieve sustainability in their activities and attract more investors. The chapter contributes to the literature by creating value through a comprehensive and theoretical literature review.

Growing food insecurity is a leading cause of fatalities, particularly in developing nations like Sub-Saharan Africa and Southeast Asia. However, the rising energy consumption and carbon dioxide (CO2) emissions are mostly associated with food production. Balancing the trade-offs between energy intensity and food security remains a top priority for environmentalists. Despite the critical role of the environment in food security, there is a scarcity of substantial studies that explore the statistical connections among food security, CO2 emissions, energy intensity, foreign direct investment (FDI) and per capita income. Therefore, this study aims to provide more precise and consistent estimates of per capita CO2 emissions by considering the interplay of food security and energy intensity within the context of emerging economies.

To examine the long-term relationships between CO2 emissions, food security, energy efficiency, FDI and economic development in emerging economies, this study employs correlated panel-corrected standard error, regression with Newey–West standard error and regression with Driscoll–Kraay standard error models (XTSCC). The analysis utilizes data spanning from 1980 to 2018 and encompasses 32 emerging economies.

The study reveals that increasing food security in a developing economy has a substantial positive impact on both CO2 emissions and energy intensity. Each model, on average, demonstrates that a 1 percent improvement in food security results in a 32% increase in CO2 levels. Moreover, the data align with the Environmental Kuznets Curve (EKC) theory, as it indicates a positive correlation between gross domestic product (GDP) in developing nations and CO2 emissions. Finally, all experiments consistently demonstrate a robust correlation between the Food Security Index (FSI), energy intensity level (EIL) and exchange rate (EXR) in developing markets and CO2 emissions. This suggests that these factors significantly contribute to environmental performance in these countries.

This study introduces novelty by employing diverse techniques to uncover the mixed findings regarding the relationship between CO2 emissions and economic expansion. Additionally, it integrates energy intensity and food security into a new model. Moreover, the study contributes to the literature by advocating for a sustainable development goal (SDG)-oriented policy framework that considers all variables influencing economic growth.

Considering the evolving importance of green finance, this study uses climate-related development mitigation finance as a proxy of green finance and investigates the impact of green finance on ecological footprint as an indicator of environmental quality along with the influence of economic growth, renewable energy, greenhouse gas emissions, trade openness and urbanization across 47 developing countries over the period 2000–2018.

After finding the presence of cross-sectional dependency among variables, the second-generation panel unit root test was employed to detect the order of integration among the variables. Since all the variables were found to be stationary, Westerlund cointegration technique was employed to detect the long-run relationship among the variables. Then, the long-run elasticity among the dependent and independent variables was tested using fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS) and pooled mean group–autoregressive distributed lag (PMG–ARDL) approaches.

The empirical findings suggest the presence of long-run relationship among all the variables, namely, ecological footprint, green finance, economic growth, renewable energy consumption, greenhouse gas emissions, trade openness and urbanization for the selected developing countries in the sample. Furthermore, economic growth, greenhouse gas emissions, trade openness and urbanization, all have a positive and significant impact on the ecological footprint, whereas renewable energy consumption and green finance have a significant and negative impact on the ecological footprint, which supports the view that environmental quality is improved with the greater use of renewable energy technologies and allocation of greater amounts of more green finance.

The empirical results of this study offer policymakers and regulators some implications for environmental policy for protecting the countries from ecological issues.

Waste management is a crucial aspect of sustainable development, but is it economically sustainable for marginalized informal firms? The study tries to answer this question by revisiting the Porter–Wagner dilemma about the association between environmental management (EM) and firm performance (FP). The study looks into the various liquid waste management practices (LWMPs) adopted by them and the overall impact of LWMPs on firms' economic performance.

The study uses the latest available cross-sectional data source on Indian informal firms by the National Sample Survey Office (NSSO), 73rd survey round 2015–16. First, ordered logistic regression was used to analyse the factors that impact a firm's adoption of a particular LWMP. Subsequently, to capture the heterogeneity among the firms based on productivity and size, a quantile regression (QR) was employed to analyse the impact of LWMPs on firm productivity. Additionally, the propensity score matching technique was used to address endogeneity concerns.

The authors find that bigger, urban-located and female-owned firms adopt cleaner LWMPs that positively impact their economic performance. Furthermore, the QR analysis observed that the most productive firms could extract higher returns from adopting cleaner LWMPs, indicating the relevance of the Porter–Wagner dilemma, i.e. environmental and economic sustainability are possibly symbiotic, thus having a feedback mechanism.

To the authors’ limited knowledge, this is the first study analysing the relationship between EM and FP among the informal sector firms, which are away from any regulations or obligations. Since sustainability is a two-way process, policies should be devised that incentivise sustainable business practices.

The modernization of the agro-based industry has encouraged the application of inorganic fertilizers to increase productivity. However, such fertilizer emissions may pose harmful environmental effects in the long run. This study aims to empirically explore the matter by applying the environmental Kuznets curve (EKC) hypothesis in the Indian agro-based industry.

The study builds two models considering nitrous oxide emission levels from inorganic (synthetic) and organic (manure) fertilizers to evaluate the safer option for the environment. The validity of an industry-specific EKC (IEKC) is tested for the models considering time series data from 1975 to 2019. Here, the autoregressive distributed lag model is applied for the 45 years long time series analysis to test the hypothesis with respect to inorganic and organic fertilizers emissions.

The existence of the IEKC is rejected by the inorganic fertilizer emissions model. Its U-shaped curve implies that applying such fertilizers will gradually cause degrading environmental effects. On the other hand, the organic fertilizer emissions model supports the existence of an inverted U-shaped IEKC. It proves that organic fertilizers are a better choice for safeguarding the environment in the long run.

Applying the EKC hypothesis on an industrial level can signify whether an industry worsens the environment in the long run. However, very few studies have explored such an application of the hypothesis in the past. Moreover, the literature could not find any previous study exploring the environmental effects of inorganic and organic fertilizers by analyzing the EKC hypothesis. The hypothesis can offer such insights with simplified empirical assessment.

Several studies have examined the effect of formal economy (usually proxy by economic growth) on environmental quality; however, the symmetric and asymmetric impact of the informal economy on environmental quality has not been examined in Nigeria. Therefore, this study aims to explore the short- and long-run (a)symmetric effect of formal and informal economies and financial development on Nigeria’s environmental quality between 1984 and 2017.

The study uses ecological footprint to measure environmental quality. An increase in ecological footprint suggests a fall in environmental quality. Informal economy is calculated as a percentage of GDP using the currency demand approach. Autoregressive distributed lag (ARDL), nonlinear ARDL cointegration framework and vector error correction granger causality are used as estimation techniques.

The study’s outcomes establish the existence of asymmetric structure in the link between economic activities and the environment both in the short and long run. The asymmetric results reveal that positive and negative changes in the formal economy increase the ecological footprint in both periods. Hence, activities in the formal economy reduce environmental quality. On the other hand, positive and negative changes in the informal economy only positively influence the ecological footprint in the long run. In contrast, it negatively impacts the ecological footprint in the short run. This suggests that activities in the informal economy worsen the long-run environmental quality. Financial development has a positive influence on the ecological footprint, thus degrading the environmental quality. Furthermore, in the short run, a unidirectional relationship from the formal economy to the ecological footprint, while a bidirectional causality exists between informal and formal economies. Meanwhile, a unidirectional causality from the (in)formal economies and financial development to the ecological footprint was found in the long run.

The outcome of this study shows that both informal and formal economies contribute to ecological footprint; therefore, mainstreaming the informal economy into the formal economy will further increase the problem of environmental degradation and worsen environmental quality.

The study investigates the symmetric and asymmetric effect of formal and informal economies on environmental quality in Nigeria, which is largely missing in the empirical literature.