BRIDGING GREEN FINANCE AND DIGITAL GROWTH: A DYNAMIC PANEL ANALYSIS OF CLIMATE-ECOLOGICAL PRESSURE AND GREEN TRANSITION IN BELT AND ROAD INITIATIVE

Abstract

The Belt and Road Initiative (BRI) has revolutionized the world with a new line of infrastructure and trade, but its environmental impacts have been controversial, with member countries digitalizing at the same time but not together with green financing. This study investigates the dynamic interaction between climate-ecological pressure and green transition in BRI economies from 2000 to 2025. The data were obtained from the World Development Indicator using a two-step system GMM estimator. This result reveals that green transition and green financial innovation have a significant impact on climate-ecological pressure, making them good levers for decarbonization. Similarly, the capacity of institutions to sustain ecological pressure underscores the relevance of good governance in improving environmental conditions. However, the positive effects on climate-ecological pressure are large, and digital connectivity is slowing the pace of the green transition in this part of the world, creating an uncertain balance between digital expansion and the green transition. It is concluded that ecological pressure and green transition dynamics have no short run influence, but they are structurally embedded. The findings indicate that digitalization will not provide environmental dividends in BRI economies without improving the green financing framework and institutional checks and balances. This study provides policy-relevant evidence of how the digital infrastructure investment of the BRI is connected to the BRI corridor's climate governance frameworks.