Green Finance and Economic Growth: A Systematic Literature Review of Policy Interventions in Emerging Markets

Abstract

Amid rising climate risks and financial pressures, emerging market economies (EMEs) are increasingly turning to green finance to stimulate sustainable economic growth. This study systematically reviews existing literature to examine how various policy instruments such as green credit schemes, disclosure mandates, tax incentives, and blended finance affect macroeconomic outcomes in EMEs. Through a systematic literature review of peer-reviewed studies published up to 2021, the article synthesizes findings across diverse regional contexts. The analysis reveals that while green credit policies in countries like China are well documented, comparative cross-country evaluations remain limited. The review finds that policy interventions significantly influence innovation, investment, and growth, yet methodological inconsistencies and geographic biases persist. These gaps highlight the need for harmonized frameworks and deeper comparative research to enhance the effectiveness of green finance in driving inclusive development.