ROLE OF SUSTAINABLE INVESTMENT IN CAPITAL MARKET DEVELOPMENT PROMOTION AND ENVIRONMENTAL GOALS ACHIEVEMENT
Keywords:
Sustainable Investing, Green Bonds, Capital Market Development, Environmental Outcomes, NigeriaAbstract
This paper examined how sustainable investment had a dual purpose of encouraging growth in the capital market and environmental objectives in Nigeria. Emphasis was on the quarterly data between Q1 2015 and Q4 2024. The study uses Autoregressive Distributed Lag bounds testing methodology to determine the effects of green bonds on bond market capitalization in comparison to GDP and renewable energy capacity. Findings indicated that there are strong positive long-term correlations between green bond issuances and capital market depth as well as environmental performance. The volume of green bonds also exhibited statistically significant effects on the growth of the bond market ( b = 0.234, p < 0.01) and the growth of the renewable energy capacity ( b = 8.456, p < 0.001). The regulatory quality will be considered the most potent factor in both models, and inflation impacts negatively on market development. The research concludes that sustainable finance presents a powerful two-fold tool, but its transformational power is severely contingent on institutional reinforcement, macroeconomic stability, the broadening of issuers, and greater verification tools to guarantee credibility and scalability within the environment of the emerging markets of Nigeria.
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