Role of financial inclusion and export diversification in determining green growth: evidence from SAARC economies

This study quantifies the impact of financial inclusion and export diversification in attaining the target of green growth for SAARC economies during the period 2000 to 2019. For the analysis purpose, this study employed second-generation econometric techniques that deal with heterogeneity and cross-sectional dependence issues. To this end, CUP-FM and CUP-BC are used to investigate the long-run dynamic equilibrium relationship among the variables of interest. The outcomes show that financial inclusion and institutional quality are eco-friendly variables and play a vital role in attaining green growth. In contrast, export diversification and FDI are inversely related with green growth in SAARC economies. Furthermore, a unidirectional causality running from financial inclusion to green growth and financial inclusion to export diversification is observed. On the basis of investigated outcomes, this research suggests essential policy recommendations to attain green growth.