Vol 8 No 1 (2021)

Sustainability in ASEAN: The Roles of Financial Development towards Climate Change

Vikniswari Vija Kumaran
Faculty of Business and Finance, Universiti Tunku Abdul Rahman (UTAR), Malaysia.
Siti Nurul Munawwarah
Faculty of Business Management and Professional Studies, Management & Science University, Malaysia.
Mohd Khairi Ismail
Faculty of Business & Management, Universiti Teknologi MARA (UiTM), Malaysia.
Published January 14, 2021
289 Views | 128 Downloads
  • Sustainable development, Economic growth, ASEAN, Financial development, CO2 emissions, Climate change.
How to Cite
Kumaran, V. V., Munawwarah, S. N., & Ismail, M. K. (2021). Sustainability in ASEAN: The Roles of Financial Development towards Climate Change. Asian Journal of Economics and Empirical Research, 8(1), 1-9. https://doi.org/10.20448/journal.501.2021.81.1.9


As we know, nowadays financial sector is waking up the climate change. Therefore, the aim and novelty of the paper is to show the link between energy efficiency, sustainable economic growth, population and financial development in ASEAN 5 countries. Panel data analysis was employed and results shows that factors such as financial development, economic growth, population and renewable energy found to be important factors in influencing climate change in this study. Based on the results, increasing financial development, more energy use, high population and increasing economic growth will generate more CO2 emissions and cause climate change. Thus, there are several policies suggested to balance the relationship between financial development and the carbon emission levels and these policy implications should be considered and carried out by government and policy makers in order to improve the environmental quality in ASEAN countries. In conclusion, in the 5 ASEAN countries, financial growth plays an important role in waking up the issues of climate change. Many past literatures focused the impacts of renewable energy consumption, population, economic growth and foreign direct investment on climate change. Thus, this study narrows the gap that exists in literature.by focusing on financial development which able to foster vigorous economic growth especially in ASEAN countries. Overall, results from the fixed effect estimates show that financial development is significant factor and has a positive contribution towards climate change.


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