Renewable Energy Consumption, Green Finance, and Environmental Regulations in Promoting Economic Growth: Evidence from SAARC Countries

Abstract

This study investigates the impact of renewable energy consumption, green finance, and environmental regulations on economic growth in SAARC countries over the period 2000 to 2023. Using panel data from eight member states, the study employs Im-Pesaran-Shin unit root tests, correlation analysis, and Fixed and Random Effects models, with the Hausman test confirming the suitability of the Fixed Effects approach. The results reveal that renewable energy consumption has a strong and significant positive effect on GDP growth, indicating its role as a key driver of sustainable development. Green finance is also found to positively influence economic growth by facilitating investment in environmentally friendly technologies and projects. Additionally, environmental regulations exhibit a positive impact, supporting the Porter Hypothesis that effective regulations can enhance innovation and productivity. Overall, the findings emphasize the importance of integrating energy transition, financial development, and regulatory policies to achieve sustainable economic growth in SAARC economies.