Ecological Roles of Green Finance, Economic Growth, and Clean Energy Use: The Moderating Role of Institutional Quality

Authors

  • Andri Suriansyah Faculty of Islamic Economics and Business, UIN Ar Raniry, Banda Aceh 23111, Indonesia
  • Javad Montazeri Department of Accounting, University of Sistan and Baluchestan, Zahedan 98167-45845, Iran

DOI:

https://doi.org/10.60084/eje.v4i2.467

Keywords:

Green finance, Economic growth, Clean energy use, Institutional quality, Ecological sustainability

Abstract

Environmental sustainability remains a critical challenge for member countries of the Organisation for Economic Co-operation and Development (OECD), where advanced economic structures coexist with high levels of resource consumption and ecological pressure. This study contributes to the literature by integrating green finance, economic growth, renewable energy consumption, and institutional quality within a unified framework, with particular emphasis on the moderating role of institutional quality in the relationship between these factors and ecological sustainability, measured by the Load Capacity Factor (LCF). Using a balanced panel dataset of 20 OECD countries over the period 2010 to 2023, the study employs the System Generalized Method of Moments (System GMM) to address endogeneity and account for dynamic relationships. The findings reveal that economic growth initially deteriorates ecological sustainability, although a nonlinear U-shaped relationship supports the Load Capacity Curve (LCC) hypothesis. Green finance, renewable energy consumption, and institutional quality all exert positive and statistically significant effects on the LCF. Importantly, the interaction results indicate that institutional quality strengthens the positive effects of both green finance and renewable energy consumption on ecological sustainability. These findings suggest that policy effectiveness depends not only on financial and energy reforms but also on institutional capacity. Accordingly, strengthening governance frameworks alongside green investment is essential for achieving sustainable development.

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Published

2026-10-27

How to Cite

Suriansyah, A. and Montazeri, J. (2026) “Ecological Roles of Green Finance, Economic Growth, and Clean Energy Use: The Moderating Role of Institutional Quality”, Ekonomikalia Journal of Economics, 4(2), pp. 130–140. doi: 10.60084/eje.v4i2.467.

Issue

Vol. 4 No. 2 (2026): October 2026 (In Press)

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Articles

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Copyright (c) 2026 Andri Suriansyah, Javad Montazeri

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