Green Finance and Economic efficiency in India and regional disparity: An inquiry into its influence using spatial data analysis

Abstract

Green finance is widely recognized and it has become an important factor affecting the economy, society, and sustainable development, and quality of life index there are not many indications that it has taken deep root in India and had gone beyond lip service. Despite the fact the Government of India as of late taken steps to move toward a more green energy solution, and address the global warming issues as a part of the bilateral and multi-governmental commitment, linking the same to corporate value seem to miss. In an additive formulation, social responsibility investment and sustainable banking lead to sustainable finance. This paper deals with the effect of green finance on the economic efficiency of India. The study uses a spatial panel regression across the five regions namely North, South, East, West, and Central region of India, and tries to understand how green finance had been implicated. The study uses several robustness checks and decomposition methods to understand the spillover, It has been observed that there is sufficient reason to believe that green finance has affected economic efficiency, especially in the southern and western regions. There are also traces of spillover of green finances on the urbanization and energy structure of the country along with the regional biases.