Strong institutions and financial development drive sustainable green economic growth
In short: Researchers analyzing data from South Asian countries between 2000 and 2018 found that the quality of a nation's institutions and its level of financial development are key drivers of sustainable, green economic growth. By examining long-term trends across these economies, the study identified a clear link between stable governance structures, robust financial systems, and the ability to achieve environmentally friendly economic progress.
This research matters because it identifies the specific structural pillars needed for countries to balance economic expansion with environmental sustainability. The authors used panel cointegration techniques alongside FMOLS and DOLS models to analyze World Bank data from several South Asian nations over nearly two decades.
A primary limitation of this study is that it relies on existing datasets provided by the World Bank, which may not capture every nuance of local institutional dynamics or specific regional variations in green growth.
Why it matters: Sustainable economic progress requires a foundation of high-quality institutions and well-developed financial systems.
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Sources
- Source: Research: Ahmed et al. (2021). Do institutional quality and financial development affect sustainable economic growth? Evidence from South Asian countries. Borsa Istanbul Review. · cc-by-nc-nd
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