Do natural resources rent increase green finance in developing countries? The role of education

Abstract

This study investigated the impact of natural resources rent and education on green finance while controlling for GDP, population growth, and trade for developing countries from 2000 to 2019. This study employed two-unit root tests for underlying variables: Levin, Lin, and Chu (LLC) and Im, Pesaran, and Shin (IPS). To check the cointegration among the variables, this study used Pedroni cointegration method. Then to estimate the long run relationships, this study used FMOLS and DOLS approaches. The findings revealed a favorable association between natural resource rent and green financing, implying that policy should encourage sustainable resource usage and environmental conservation. The study further found a positive association between GDP and green finance, indicating the importance of policies that encourage economic growth while also supporting the green finance industry . Finally, the study discovered that education has a positive impact on green finance, implying the need for policies that invest in education to promote sustainable development and raise awareness about green finance. Future research could investigate the efficacy of policy interventions aimed at promoting green finance, as well as identify additional drivers of the sector's growth. • This study investigated the impact of natural resources rent and education on green finance. • Developing countries data used for analysis. • FMOLS method indicates that natural resources increase green finance. • Similarly, education also help to boost green finance in developing countries.