Exploring the impact of green bond issuance on economic growth across asia: Strategic insights and key lessons for vietnam's sustainable growth

Abstract

Green bonds have emerged as a vital financial instrument for funding environmentally sustainable projects while promoting economic development. This study examines the impact of green bond issuance (GBI) on economic growth (GDP) across ten Asian countries from 2016 to 2023, providing strategic insights and key lessons for Vietnam’s sustainable growth. Using a panel data analysis approach, we employ Ordinary Least Squares (OLS), Fixed Effects Model (FEM), Random Effects Model (REM), and Generalized Least Squares (GLS) regression techniques to assess the relationship between green bond issuance and economic performance. Our findings indicate that green bond issuance positively contributes to GDP growth, reinforcing the role of green finance in fostering sustainable economic expansion. Additionally, foreign direct investment (FDI) and trade openness (TRADE) exhibit significant positive effects on economic growth, while inflation (INF) and stock returns (SR) show no statistically significant impact. The results highlight the potential for Vietnam to leverage green bonds as a financing tool for sustainable infrastructure, renewable energy projects, and environmental conservation. This study provides practical implications for policymakers, investors, and financial institutions, emphasizing the need for a well-structured regulatory framework, incentives for green bond issuers, and increased investor awareness to accelerate Vietnam’s transition toward a greener economy. By learning from successful green finance models in Asia, Vietnam can enhance its green bond market development and align with global sustainability goals