Climate Finance in East Asia and The Pacific from The Perspective of Governance and Financial Distress
DOI:
https://doi.org/10.35313/ijabr.v7i01.470Keywords:
Climate Finance, East Asia and the Pacific, Governance, Financial DistressAbstract
This study analyses the influence of governance and financial distress on climate funding in East Asia and the Pacific (EAP). A multiple linear regression analysis was undertaken using panel data from 12 EAP nations between 2015 and 2021 to investigate the links between governance, financial distress, and climate finance. The results demonstrate that governance structures are more successful in obtaining climate related funds. Additionally, financial challenges show a notable positive correlation, indicating that financially struggling nations tend to attract more global climate funds, possibly due to their limited domestic capacities for addressing climate change. The regression analysis explained 85.71% of the variations in climate finance, underscoring the importance of governance and financial conditions in influencing how climate finance is distributed within the region. These findings underscore the need of robust governance and financial stability in maximizing the use of climate finance for mitigation and adaptation initiatives.
Downloads
References
Adebayo, T. S., Akadiri, S. Saint, Uhunamure, S. E., Altuntaş, M., & Shale, K. (2022). Does political stability contribute to environmental sustainability? Evidence from the most politically stable economies. Heliyon, 8(12). doi: 10.1016/j.heliyon.2022.e12479
Ahluwalia, M. S. (2023). Climate change challenges Asia Pacific security. East Asia Forum Quarterly, 14(4). Retrieved from: https://eastasiaforum.org/2023/01/07/climate-change-challenges-asia-pacific-security/
Alshahrani, F., Eulaiwi, B., Duong, L., & Taylor, G. (2023). Climate change performance and financial distress. Business Strategy and the Environment, 32(6), 3249–3271. doi: 10.1002/bse.3298
Amar, Causevic., Nabil, Haque., Matthew, LoCastro., Sujeetha, Selvakkumaran., Sasja, Beslik., Sara, C. (2023). Assessment of the Post-Paris Agreement Era: International Public Climate Finance in Countries with Low Governance Scores. The SAIS Review of International Affairs, 43(1), 75–99. doi: 10.1353/sais.2023.0002
Bae, S. M., Masud, M. A. K., Rashid, M. H. U., & Kim, J. D. (2022). Determinants of climate financing and the moderating effect of politics: evidence from Bangladesh. Sustainability Accounting, Management and Policy Journal, 13(1), 247–272. doi: 10.1108/SAMPJ-04-2019-0157
Barbara Buchner; Clark, Alex; Falconer, Angela; Macquarie, Rob; Meattle, Chavi; Tolentino, Rowena; Wetherbee, C. (2019). Global Landscape of Climate Finance 2019. Climate Policy Initiative, November, 15. Retrieved from: https://www.climatepolicyinitiative.org/wp-content/uploads/2019/11/2019-Global-Landscape-of-Climate-Finance.pdf
Basak, R., & Werf, E. van der. (2019). Accountability mechanisms in international climate change financing. International Environmental Agreements: Politics, Law and Economics, 19(3), 297–313. doi: 10.1007/s10784-019-09437-8
Bolton, P., Despres, M., Pereira da Silva, L. A., Svartzman, R., & Samama, F. (2020). The Green Swan (Issue January). Retrieved from: https://www.bis.org/publ/othp31.pdf
Charfi, N. E.-. (2024). IMF WEO macroeconomic forecasts panel dataset. Data in Brief, 56, 9. doi: 10.1016/j.dib.2024.110802
David, R. J., Tolbert, P. S., & and Johnny Boghossian. (2019). Institutional Theory in Organization Studies. Oxford Research Encyclopedia of Business and Management, December. doi: 10.1093/acrefore/9780190224851.013.158
Diallo, Mamadou, Nouhou., Bah, Mamadou, Mouminy., Ndiaye, Seydou, N. (2023). Climate risk and financial stress in ecowas. Journal of Climate Finance, 5(4). doi: 10.1016/j.jclimf.2023.100025
Djankov, S., Montalvo, J. G., & Reynal-Querol, M. (2008). The curse of aid. Journal of Economic Growth, 13(3), 169–194. doi: 10.1007/s10887-008-9032-8
Eert, P. B. (2022). The Urgenda Climate Case in the Netherlands: Separation of Powers and the Rule of Law. The Taiwan Law Review, 327, 215–229. doi: 10.53106/1025593132712
ESCAP. (2023). 2023 Review of Climate Ambition in Asia and the Pacific Just transition towards regional net-zero climate resilient development. Retrieved from: https://www.unescap.org/kp/2023/2023-review-climate-ambitionasia-and-pacific-just-transition-towards-regional-net-zero
European Court of Auditors. (2021). Special Report 12/2021: The Polluter Pays Principle: Inconsistent application across EU environmental policies and actions.
Freeman, R. E. (2015). Stakeholder Theory. In Wiley Encyclopedia of Management. doi: 10.1002/9781118785317.weom020179
Giglio, Stefano; Kelly, Bryan; Stroebel, J. (2021). Climate finance. Annual Review of Financial Economic, 13, 15–36. doi: 10.1146/annurev-financial-102620-1033-11
Gupta, A., & Asselt, H. van. (2019). Transparency in multilateral climate politics: Furthering (or distracting from) accountability? Regulation and Governance, 13(1), 18–34. doi: 10.1111/rego.12159
Habib, R., Aksar, M., & Nadeem, A. (2024). Investigating the Nexus of Control of Corruption, Green Finance, and Environmental Upgradation in Developed Economies. SAGE Open, 14(1), 1–14. doi: 10.1177/21582440241234248
Hong, H., Karolyi, G. A., & Scheinkman, J. A. (2020). Climate finance. Review of Financial Studies, 33(3), 1011–1023. doi: 10.1093/rfs/hhz146
Huber, J., & Murray, U. (2024). Turning climate justice into practice? Channeling loss and damage funding through national social protection systems in climate-vulnerable countries. Wiley Interdisciplinary Reviews: Climate Change, 15(2), 1–21. doi: 10.1002/wcc.867
Jepperson, Ronald L; Meyer, J. W. (2021). Refflections on Part II: Institutional Theory. In Institutional Theory: The Cultural Construction of Organizations, States, and Identities (Issue May, pp. 126–136). Cambridge University Press. doi:10.1017/9781139939744.006
Kotchen, M. J. (2020). On the scope of climate finance to facilitate international agreement on climate change. Economics Letters, 190, 109070. doi: 10.1016/j.econlet.2020.109070
Lim, C. H., Basu, R., Carriere-Swallow, Y., Kashiwase, K., Kutlukaya, M., Li, M., Refayet, E., Seneviratne, D., Sy, M., & Yang, R. (2024). Unlocking Climate Finance in Asia-Pacific: Transitioning to a Sustainable Future. In Departmental Papers (Vol. 2024, Issue 1). IMF. doi: 10.5089/9798400256752.087
Lubinga, M. H., & Mazenda, A. (2024). Empirical Analysis of the Effect of Institutional Governance Indicators on Climate Financing. Economies, 12(2), 1–19. doi: 10.3390/economies12020029
Minhas, A. S., Maqsood, N., Shahid, T. A., & Rehman, A. U. (2024). Investment Performance in Green Finance: Assessing the Impact of Environmental Social and Governance Integration. IRASD Journal of Economics, 6(1), 27–44. doi: 10.52131/joe.2024.0601.0192
Mintz-Woo, K., & Leroux, J. (2021). What do climate change winners owe, and to whom? Economics and Philosophy, 37(3), 462–483. doi: 10.1017/S0266267120000449
Moau, Yong, Toh., Ali, Albada., Sin, Huei, N. (2023). Effect of Country Governance on Cross-Border Renewable Energy Investment and Climate Actions in Emerging Countries. Emerging Markets Finance and Trade, 59, 3813–3827. doi: 10.1080/1540496x.2023.2247139
Nina, A.-A. (2023). Climate Finance and Governance. In The Oxford Handbook of International Law and Development (pp. 581–600). Oxford Academic. doi: 10.1093/oxfordhb/9780192867360.013.42
Nor, M. I., & Mohamed, A. A. (2024). Investigating the complex landscape of climate finance in least developed countries (LDCs). Discover Environment, 2(1). doi: 10.1007/s44274-024-00102-9
Nugrahanti, Y. W. (2021). Do Political Connection and Corporate Governance Mechanism Increase Corporate Social Responsibility Disclosure? International Journal of Applied Business Research, 3(2), 28–46. doi: 10.35313/ijabr.v3i2.147
Nzama, L., Sithole, T., & Kahyaoglu, S. B. (2023). The Impact of Government Effectiveness on Trade and Financial Openness: The Generalized Quantile Panel Regression Approach. Journal of Risk and Financial Management, 16(1). doi: 10.3390/jrfm16010014
Omri, A., Kahia, M., & Kahouli, B. (2021). Does good governance moderate the financial development-CO2 emissions relationship? Environmental Science and Pollution Research, 28(34), 47503–47516. doi: 10.1007/s11356-021-14014-1
Peterson, L., & Skovgaard, J. (2019). Bureaucratic politics and the allocation of climate finance. World Development, 117, 72–97. doi: 10.1016/j.worlddev.2018.12.011
Pigou, A. C. (1920). The Ecnomics of Welfare: Vol. London, Ma. McMillan. Retrieved from: http://pombo.free.fr/pigou1920.pdf
Reisinger, A., D. Cammarano, A. Fischlin, J.S. Fuglestvedt, G., Hansen, Y. Jung, C. Ludden, V. Masson-Delmotte, R. Matthews, J.B.K Mintenbeck, D.J. Orendain, A. Pirani, E. P., & Romero, and J. (2023). IPCC, 2023: Annex I: Glossary. doi: 10.59327/IPCC/AR6-9789291691647.002
Richardson, B. J. (2009). Climate finance and its governance: Moving to a low carbon economy through socially responsible financing? International and Comparative Law Quarterly, 58(3), 597–626. doi: 10.1017/S0020589309001213
Susilawati, R., Edman, M., & Mai, M. U. (2024). The Relationship between CSR and Profitability through Environmental Performance Moderation : The Use of Robust Path Analysis in Warp-PLS. International Journal of Applied Business Research, 6(2), 189–201. doi: 10.35313/ijabr.v6i02.422
Taufik, M., & Clevertan, W. (2023). Dividend, Corporate Social Responsibility, And Non-Renewable Energy: Testing Board Diversity Alignments. International Journal of Applied Business Research, 2023(1), 101–121. doi: 10.35313/ijabr.v5i01.306
The World Bank. (2022). East Asia and Pacific Overview: Development news, research, data | World Bank. World Bank Report. Retrieved from: https://www.worldbank.org/en/region/eap/overview
Varadaraja, Dhulasi Birundha; Chitra, M. (2022). Global Climate Financing of Multilateral Development Banks - An Analysis. Shanlax International Journal of Economics, 10(2), 64–77. doi: 10.34293/economics.v10i2.4747
Watson, C., Schalatek, L., & Evequoz, A. (2022). Accessing Climate Finance : Small Island Developing States. In Un-Ohrlls. Retrieved from: https://www.un.org/ohrlls/sites/www.un.org.ohrlls/files/accessing_climate_finance_challenges_sids_report.pdf
World Bank. (2024a). Control of Corruption (p. 2). World Bank, Washington, DC. Retrieved from: https://www.worldbank.org/content/dam/sites/govindicators/doc/cc.pdf
World Bank. (2024b). Government Effectiveness (p. 2). World Bank, Washington, DC. Retrieved from: https://www.worldbank.org/content/dam/sites/govindicators/doc/ge.pdf
World Bank. (2024c). Political Stability and Absence of Violence / Terrorism (p. 2). World Bank, Washington, DC. Retrieved from: https://www.worldbank.org/content/dam/sites/govindicators/doc/pv.pdf
World Bank. (2024d). Rule of Law. In Worldwide Governance Indicators (Issue 3, p. 2). World Bank, Washington, DC. Retrieved from: https://www.worldbank.org/content/dam/sites/govindicators/doc/rl.pdf
World Bank. (2024e). Voice and accountability (p. 2). World Bank, Washington, DC. Retrieved from: https://www.worldbank.org/content/dam/sites/govindicators/doc/va.pdf
World Bank. (2024f). Worldwide Governance Indicators. Worldbank.Org. Retrieved from: www.govindicators.org
Yun, S. (2022). Empirical Analysis on the Determinants of Allocation and Development Effects of Multilateral Climate Finance. Seoul National University.
Published
Dimensions Badge
How to Cite
Issue
Section
License
Copyright (c) 2025 International Journal of Applied Business Research
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Author’s Warranties
The author warrants that the article is original, written by the stated author(s), has not been published before, contains no unlawful statements, does not infringe the rights of others, is subject to copyright that is vested exclusively in the author and free of any third party rights, and that any necessary written permissions to quote from other sources have been obtained by the author(s).
Copyright
The copyright is transferred to Publishers. As a condition of publication, the authors must grant the IJABR the right to distribute their manuscripts to the widest possible readership in online/electronic format. In this term, the corresponding author must fill out the Copyright Transfer Agreement that we have provided. If the article was jointly prepared by other authors, the signatory of this form warrants that he/she has been authorized by all co-authors to sign this agreement on their behalf, and agrees to inform his/her co-authors of the terms of this agreement.
User Rights
International Journal of Applied Business Research objective is to disseminate articles published are as free as possible. Under the Creative Commons Attribution License (CC BY-SA 4.0), this journal permits users to share (copy and redistribute the material in any medium or format) and adapt (remix, transform, and build upon the material) the work for any purpose, even commercially with an acknowledgment of the work's authorship and initial publication in IJABR. Users will also need to attribute authors and this journal to distributing works in the journal. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in IJABR. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
