The rapid economic growth in Asia, driven by technological advancements,
manufacturing, and a significant population, has profound implications for
environmental quality. This study investigates how financial development impacts
environmental quality in major Asian economies-China, Japan, India, South Korea,
and Indonesia-controlling for economic growth, human capital, and urbanization from
1990 to 2019. Utilizing the ARDL bounds testing approach, the analysis explores both
short- and long-term relationships among these variables. Results indicate that financial
development and urbanization contribute to increased CO2
emissions in the long run,
while rising GDP per capita tends to reduce emissions, likely due to cleaner technology
adoption in advanced economies. However, human capital shows a positive association
with emissions, underscoring the need for education focused on environmental
sustainability. These findings emphasize the importance of policies promoting
sustainable finance, green skill development, and clean technology adoption,
supporting economic growth without compromising environmental health in Asia’s
rapidly developing economies.
Keywords: Asian economies, Clean technology adoption, Environmental sustainability, Financial development, Green skill development, Sustainable finance.
