Green financing initiatives and economic stability in Nigeria

Abstract

This study examined the relationship between green financing initiatives (GFI) and economic stability in Nigeria from 2020 to 2023. The independent variables are Green Prevention Costs (GNPC), Green Evaluation Costs (GNEC), and Green Internal Failure Costs (GNIC), while economic stability being a dependent variable was measured by Real Gross Domestic Product (RGDP) and Trade Openness (TROP) was used as a control variable. Secondary data was collected from the World Bank's Pollution Management database and the Central Bank of Nigeria Statistical Bulletins, with analysis conducted using Robust Least Squares (RLS) in E-Views 9.0. The results indicated that both GNPC and GNIC had a significant positive effect on economic stability, while GNEC had an insignificant effect. The study concluded that GFI, particularly GNPC and GNIC, plays a crucial role in enhancing Nigeria's economic stability. It recommended that regulatory authorities allocate more funds toward Green Prevention Costs and re-assess the emphasis on Green Evaluation Costs. This research contributes to ongoing efforts to align firm activities with environmental sustainability in the context of the Nigerian economy.