Introduction

According to Zhao et al. (2022):

“Climate change has been regarded as the single largest global health challenge in the 21st century by affecting the physical environment and ecosystem and their interactions with human beings”

In essence, climate change presents an unprecedented challenge to life on Earth, evidenced by escalating global temperatures, intensified extreme weather events, melting ice caps, and disrupted ecosystems (Yoshino et al., 2021; Taghizadeh-Hesary et al., 2022; Kabir et al., 2023). These transformations stem directly from human activities, notably the excessive emission of greenhouse gases. The aftermath of the COVID-19 pandemic has seen economies worldwide rebound and thrive, accompanied by a surge in economic activities that exacerbate environmental pollution (Zhao and Rasoulinezhad, 2023; Moyo et al., 2023). This accentuates the critical role of sustainable development in our collective efforts to address climate change. Sustainable development, embracing economic, social, and environmental facets, becomes paramount in mitigating the adverse impacts of climate change. It entails fostering responsible and balanced growth that satisfies present needs without compromising the ability of future generations to meet their own requirements. Ding et al. (2021) elaborate on how integrating sustainable practices can curtail pollution, transition to renewable energy sources, safeguard biodiversity, and establish a more resilient and harmonious relationship with our planet. The pandemic has underscored the pressing need for sustainable development, urging us to pursue a greener and more sustainable trajectory for the future of our planet (Tu et al., 2020; Afzal et al., 2022; Li et al., 2023; Matiiuk et al., 2023).

One of the foremost hurdles impeding the progression of sustainable development is the scarcity of capital. The implementation of sustainable projects necessitates substantial investments in various areas such as renewable energy infrastructure, green technologies, eco-friendly transportation, waste management systems, and sustainable agriculture practices (Rasoulinezhad and Taghizadeh-Hesary, 2022; Phung et al., 2023; Zhang et al., 2023). However, securing access to adequate funding remains a significant challenge. Many sustainable initiatives entail sizable upfront costs and long-term investments, rendering them less appealing to conventional financial institutions and investors. Addressing this shortage of capital is paramount to expediting sustainable development (Agoraki et al., 2023). Encouraging public-private partnerships, devising innovative financing mechanisms, providing tax incentives, and fostering collaboration among governments, businesses, and non-profit organizations are crucial measures in surmounting this obstacle and propelling sustainable initiatives forward toward the creation of a more sustainable and resilient future (Taghizadeh-Hesary et al., 2022).

The recognition of the capital shortage for sustainable development has prompted scholars and experts to underscore the importance of private investment in sustainable projects (Xu et al., 2022). Private capital infusion plays a critical role in alleviating the funding shortfall for green initiatives, particularly in many non-high-income economies where state capital alone is insufficient to effectively support sustainable projects. Involving private investors and businesses in sustainable ventures can unlock significant financial resources necessary for implementing renewable energy initiatives, sustainable infrastructure, conservation efforts, and other environmentally beneficial projects (Wang and Fan, 2023). Governments and policymakers must establish an enabling environment that incentivizes private investment in sustainability, fostering public-private partnerships, offering tax incentives, and implementing supportive regulations to attract private capital. This collaborative approach is essential for bridging the capital gap and propelling sustainable development on a global scale.

Collaborative governance, often synonymous with good governance, plays a crucial role in motivating private investors to actively participate in sustainable projects (Sundqvist- Andberg and Akerman, 2022). When governments and regulatory bodies demonstrate transparency, accountability, and a commitment to sustainability, they create an environment of trust and credibility that attracts private investment. Clear policies, regulatory frameworks, and incentives that promote sustainable practices give investors confidence in the longevity and stability of their investments. Moreover, involving private investors in decision-making processes, seeking their input, and valuing their expertise fosters a sense of ownership and alignment with sustainable goals. Public-private partnerships, a hallmark of collaborative governance, enable shared responsibilities and risk, further encouraging private-sector involvement in sustainability initiatives (Sedlacek et al., 2020). Shan et al. (2023) state that by fostering a culture of collaboration, trust, and mutual benefit, collaborative governance becomes a driving force in mobilizing private capital toward sustainable projects, ultimately leading to a more sustainable and resilient future.

The primary focus and rationale behind this study involve examining the influence of good governance, serving as a proxy for collaborative governance, on the sustainable development index within vulnerable low and lower-middle-income Asian countries. These countries face heightened vulnerability to climate change and encounter challenges due to inadequate state capital to effectively drive green projects (Pickson et al., 2023). The study aims to shed light on the significant role that good governance can play in fostering sustainable development in settings with limited resources. By exploring how governance practices impact the sustainability index, particularly in regions vulnerable to climate change, the research seeks to provide valuable insights into policy reforms, regulatory frameworks, and collaborative models that can encourage private-sector involvement. Understanding these dynamics will facilitate the development of informed strategies to attract private investment and expedite sustainable initiatives, ultimately contributing to the resilience and sustainability of these vulnerable Asian nations.

The contributions of this research to existing literature lie in its specialized focus on the relationship between collaborative governance and sustainability within non-high-income Asian countries. While extensive research exists on sustainability and governance, there is a notable gap in the context of non-high-income Asian nations that face unique challenges related to climate vulnerability and limited state capital. By narrowing the scope to this specific demographic, the study contributes nuanced insights into the intricacies of collaborative governance and its direct influence on sustainability efforts. It provides a deeper understanding of how effective collaboration between public and private sectors, informed by good governance principles, can bolster sustainable development despite financial constraints. Through empirical analysis and case studies, this research aims to shed light on successful collaborative governance models that have demonstrated positive impacts on sustainability in similar settings, paving the way for more targeted and effective policy recommendations and interventions tailored to the needs of these nations.

The research paper will follow a structured organization. In section “Literature review”, an extensive examination of existing literature will be conducted, analyzing various threads and pinpointing gaps pertaining to collaborative governance and sustainability within non-high-income Asian countries. This section will consolidate the current knowledge base and highlight areas that necessitate further exploration. Moving on to the section “Theoretical background”, the theoretical underpinnings will be discussed, presenting the conceptual framework that guides the study in understanding the correlation between collaborative governance and sustainable development in the specified context. Section “Research methodology” will delineate the research methodology, providing a detailed account of the research design, methods for data collection, and analytical approaches utilized to address the research inquiries. Additionally, this section will furnish details regarding data sources and the tools employed for the analysis. In the section “Estimation findings”, the empirical findings will be presented, delivering a thorough analysis of the research data and discussing their implications in alignment with the research objectives. Finally, the last section will encapsulate the conclusion, summarizing the main findings, deliberating their implications, and suggesting recommendations for policy, prospective research, and the practical application of the study’s insights.

Literature review

It is crucial to meticulously identify gaps within the existing literature to establish the unique contributions and research novelties of our paper. In this section, we delve into an extensive review of the literature by delineating specific strands that guide our analysis.

The initial cluster of studies underscores the crucial role of sustainable development in addressing climate change, integrating economic, social, and environmental aspects to achieve a balanced equilibrium. As articulated by Bonnedahl et al. (2022) and Zakari et al. (2022), environmental sustainability entails responsible resource management and the mitigation of environmental degradation, while social sustainability focuses on enhancing human well-being and ensuring equity. Economically, sustainable development aims to foster growth while preserving natural resources, thereby promoting long-term prosperity (Rasoulinezhad, 2020; Garcia et al., 2023). Initiatives to combat climate change through sustainable development encompass transitioning to renewable energy sources, improving energy efficiency, implementing sustainable urban planning, and fostering sustainable consumption and production practices. The studies highlight sustainable development’s pivotal role in mitigating climate change (Mehmood et al., 2023). According to Dannevig et al. (2022) and Lee et al. (2022), the integration of sustainable practices across various sectors renders sustainable development a vital tool in achieving global climate objectives, ultimately leading to a more sustainable and resilient future.

The involvement of private investment in green projects has emerged as a significant strand of literature focusing on sustainable development and climate change mitigation. Private investment is seen as a crucial driver in funding and supporting environmentally friendly projects, providing essential capital for sustainable initiatives (Ye and Rasoulinezhad, 2023). Researchers like Yan and Haroon (2023) emphasize the importance of incentivizing private-sector engagement through various financial mechanisms, policy frameworks, and regulatory incentives. Moreover, studies underscore the potential benefits of public-private partnerships (PPP) in promoting green projects by leveraging both public resources and private expertise (Castelblanco and Guevara, 2022). The literature emphasizes the need to create an enabling environment that attracts private investors by ensuring stable returns, risk mitigation strategies, and alignment with sustainability goals (Yousaf et al., 2022; Wei et al., 2023).

The concept of collaborative governance emerges as a pivotal aspect within the literature, emphasizing its profound influence on attaining sustainability objectives. Collaborative governance entails the partnership and coordination among various stakeholders, spanning government entities, non-governmental organizations, businesses, and communities, in decision-making processes concerning sustainable development (Wang and Wang, 2023). Scholarly research underscores the efficacy of collaborative approaches in tackling intricate sustainability challenges, fostering collective action, and forging consensus (Han et al., 2022). Moreover, the literature accentuates that collaborative governance fosters transparency, inclusivity, and shared responsibility, enabling the integration of diverse perspectives and expertise to formulate comprehensive and sustainable solutions (Shan et al., 2023). Additionally, scholars emphasize the role of collaborative governance in bolstering adaptive capacity and resilience to environmental changes, underscoring its significance in achieving sustainability objectives.

A critical literature gap exists concerning the assessment of the impact of collaborative governance on private investment in green projects, specifically within low and lower-middle-income Asian countries. While collaborative governance has gained attention for its potential to stimulate sustainable development, there is a dearth of research focusing on its influence in attracting private investment towards environmentally sustainable projects in these regions. Understanding how collaborative governance models facilitate public-private partnerships and influence private-sector engagement in sustainable initiatives is essential for these economically constrained nations. Investigating this gap is crucial as it can shed light on the effectiveness of collaborative governance in mobilizing private capital towards green projects, enabling the development of tailored strategies to promote sustainability and combat climate change in these vulnerable Asian countries.

Theoretical background

Collaborative governance assumes a pivotal role by employing both direct and indirect approaches to drive private investment into green projects, thus catalyzing sustainable development. At the direct level, collaborative governance fosters a cooperative atmosphere conducive to forming public-private partnerships. This involves close collaboration among governmental bodies, private investors, and non-governmental organizations, enabling joint planning, financing, and implementation of sustainable initiatives. This collaborative framework facilitates direct financial investments from the private sector into green projects, ensuring a robust capital injection vital for the advancement of sustainable development agendas.

In addition to its direct impact, collaborative governance exerts an indirect influence on private investment by bolstering policy frameworks and regulatory environments. The collaborative efforts of diverse stakeholders, operating within the framework of collaborative governance, strengthen these frameworks to offer clarity and stability to private investors regarding sustainability objectives and initiatives. Well-defined regulations, complemented by strategic incentives, significantly shape investment decisions by mitigating risks and uncertainties for potential investors. Consequently, investors are more inclined to channel their resources into environmentally responsible projects, buoyed by the supportive policy landscape fostered through collaborative governance.

Furthermore, collaborative governance fosters a culture of cooperation, knowledge exchange, and innovation within the realm of sustainable development. This collaborative culture indirectly stimulates private investment by nurturing an ecosystem inherently conducive to sustainable initiatives. By encouraging stakeholders to combine their expertise and resources, collaborative governance not only enhances the feasibility and success of sustainable projects but also attracts private investors seeking alignment with these shared objectives. Ultimately, the multifaceted influence of collaborative governance, both direct and indirect, plays a pivotal role in mobilizing private investment for green projects, guiding us toward a sustainable and resilient future.

Research methodology

In this section, we will extensively analyze the data related to variables and delineate the steps involved in estimation. To initiate, we will provide a comprehensive elucidation of the selected variables, thoroughly detailing their distinct features and characteristics. The selection process originates from the primary research inquiries that revolve around how the promotion of good governance can influence private investment in green projects. The cohort under investigation comprises 11 Asian countries with low and lower-middle incomes, namely Bangladesh, Cambodia, Iran, India, Lao, Myanmar, Turkmenistan, Mongolia, Vietnam, the Philippines, and Sri Lanka. We have gathered data spanning from 2000 to 2020 for these chosen entities, resulting in a total of 231 observations. The primary dependent variable of focus is private investment in green projects, while the principal explanatory variable is the good governance index. Additionally, the model takes into consideration control variables encompassing economic uncertainty, gross domestic product (GDP), the number of SMEs, and the total loans provided by banks.

The details regarding the chosen variables are presented in Table 1 in the following manner:

Table 1 Variables’ characteristics.
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The anticipated impacts of the independent variables, which include the good governance index, economic uncertainty index, GDP, the number of SMEs, and the total loans provided by banks, on the dependent variable, namely private investment in green projects, are expected to be multifaceted. Each of these independent variables may exert varying degrees of influence on private investment in green projects.

The good governance index is expected to positively affect private investment in green projects, as it reflects a stable and transparent regulatory environment that can attract investors to environmentally friendly initiatives. Similarly, a lower economic uncertainty index is likely to encourage higher private investment in green projects, as it signifies a more predictable economic landscape for investors (Table 2).

Table 2 Discussion on expected signs of regressors.
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In addition, the GDP holds the potential to exert a beneficial influence on private investment in green projects. A higher GDP frequently aligns with heightened levels of economic activity, reflecting a robust and thriving economy. This increased economic activity translates into greater financial resources available for investments across various sectors, including the burgeoning green projects. A buoyant GDP indicates a prosperous economic environment, which instills confidence in investors and stakeholders, encouraging them to allocate more funds towards sustainable and eco-conscious ventures. This financial buoyancy not only amplifies the capital pool for green projects but also signals a favorable investment climate that can attract both domestic and international investors, further propelling the growth of sustainable initiatives.

Furthermore, a higher concentration of small and medium-sized enterprises (SMEs) in an economic landscape can yield a favorable impact on private investment in green projects. SMEs are known for their agility and innovation, enabling them to swiftly adapt and embrace eco-friendly practices. Due to their smaller size and organizational structure, SMEs can often implement sustainability initiatives more efficiently and with lesser bureaucratic hurdles. This inherent nimbleness allows them to swiftly respond to market demands for environmentally sustainable products or services. As a result, a growing presence of SMEs focused on sustainable practices can foster a culture of innovation within the green sector, attracting more private investment and paving the way for sustainable development.

The provision of total loans by banks plays a pivotal role in shaping the landscape of private investment in green projects. When banks increase their allocation of funds and actively engage in lending for sustainable initiatives and eco-friendly projects, it has a profound impact on stimulating private investment within the burgeoning green sector. This enhanced financial support not only facilitates the initiation of green projects but also accelerates their development and growth by providing the necessary capital and resources. By fueling the investment momentum in sustainable endeavors, the banking sector effectively promotes the adoption of environmentally conscious practices and encourages businesses and individuals to embrace sustainable solutions. Consequently, this symbiotic relationship between banks’ lending practices and private investment contributes to the advancement of a sustainable and eco-conscious economy, fostering long-term environmental benefits and economic growth.

In terms of sensitivity, it is challenging to definitively predict which independent variable would have the greatest impact on the dependent variable, as it often depends on the specific context and dataset being analyzed. However, it is possible that the good governance index and the economic uncertainty index might be particularly influential, as they can set the overall investment climate.

Based on the variables that have been elucidated, we can formulate the core panel data equation denoted as Eq. (1).

$$\begin{array}{l}{{LPIGP}}_{{it}}={C}_{0}+{{\gamma }_{1}{LGGIN}}_{{it}}+{{\gamma }_{2}{LUNE}}_{{it}}+{{\gamma }_{3}{LGDP}}_{{it}}+{{\gamma }_{4}{LSME}}_{{it}}\\\qquad\qquad\quad+{{\gamma }_{5}{LLPB}}_{{it}}+{\varepsilon }_{{it}}\end{array}$$
(1)

To thoroughly evaluate the coefficients of the independent variables, it is crucial to conduct a comprehensive assessment of two key aspects: the homogeneity of slopes, as outlined by and the presence of cross-sectional dependency, posited by Breusch-Pagan (BP) in 1980 and Pesaran in 2004 (P-CD test), within the selected panel of low and lower-middle-income Asian economies. These foundational examinations provide valuable insights guiding the choice of an appropriate panel unit root test.

Given the identified cross-sectional dependency, our scrutiny intensifies with the application of the cross-sectional augmented Dickey-Fuller (CADF) and the cross-sectional IPS (CIPS) techniques, developed by Pesaran in 2007. Subsequently, attention turns to the framework established by Westerlund in 2007, shedding light on the path to unraveling the puzzle of panel co-integration. This critical step reveals the potential long-term interconnections underlying the variables under examination.

Armed with this foundational understanding, our investigative journey proceeds to adopt the cross-sectional autoregressive distributed lag (CS-ARDL) approach. This meticulous approach unveils both the short-run and long-run coefficients, intricately delineating the relationships within the dataset. However, our quest for empirical truth does not conclude here. Acknowledging the need to enhance the robustness of our findings, we initiate a battery of rigorous tests.

Estimation findings

In this section, we delve into the results obtained through our empirical estimation endeavors. To embark on this journey, we first elucidate the outcomes derived from various stages of empirical estimation. Our primary focus is on unveiling the implications of slope homogeneity and assessing the existence of cross-sectional dependency within the extensive panel of chosen Asian economies falling within the low and lower-middle-income categories. To present a clear view, the detailed findings from these critical assessments are meticulously outlined in Tables 3 and 4. It is through this thorough exploration that a definitive verdict is reached, guiding our subsequent actions. The discerning insights underscore the importance of accounting for the intricate web of cross-sectional dependency as we progress in our estimation endeavors. This foundational understanding sets the stage for a more nuanced and well-informed interpretation of the empirical outcomes that unfold in the subsequent sections.

Table 3 CD status of the panel of Asian countries.
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Table 4 Slope homogeneity test.
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The outcomes of the cross-sectional dependency (CD) test distinctly highlight the constraints of the conventional panel unit root test when applied to our intricate dataset. In response to this pivotal concern, we pivot our approach to embrace the CADF and CIPS techniques. This deliberate shift is motivated by the CADF and CIPS techniques’ adeptness in surmounting the challenges posed by cross-sectional dependency, thereby ensuring an exceptionally precise evaluation of stationarity.

The results obtained from the CADF and CIPS tests, meticulously delineated in Table 5, unequivocally affirm that all variables demonstrate a stationary behavior of orders I (0) and I (1).

Table 5 CADF and CIPS findings about the unit root status.
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Following this, a critical advancement in our analytical journey entails evaluating the enduring relationships among variables. This assessment is achieved by subjecting the variables to the Westerlund co-integration test. Conceptualized by Westerlund in 2007, this technique presents a significant advantage by accommodating the potential influence of cross-sectional dependency within the panel data structure. The crucial insights derived from this assessment are succinctly summarized in Table 6. The results of the test conclusively affirm the presence of co-integration among the variables, specifically in the long-term context.

Table 6 Westerlund test result.
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Progressing further, our analytical journey sets sail on the endeavor to quantify the influence of coefficients. This task is achieved by leveraging the CS-ARDL technique, chosen for its importance considering the I(1) nature of the variables in focus and the necessity to address the intricate cross-sectional dependency within our estimator. The tableau of results, thoughtfully presented in Table 7, illuminates the key insights derived from this meticulous estimation effort.

Table 7 CS-ARDL estimation findings.
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The analysis reveals a noteworthy correlation between the good governance index and private involvement in green projects. Specifically, a 1% enhancement in the good governance index correlates with a 0.34% rise in private participation in green projects in the short term and a more substantial 0.64% increase in the long term. This discrepancy suggests that the impact of the good governance index becomes more pronounced and influential over an extended period. In the short term, immediate adjustments or responses may be constrained, possibly due to the time needed for businesses to adapt to improved governance conditions. However, in the long term, enhanced governance mechanisms cultivate an atmosphere of stability, transparency, and investor confidence, thereby encouraging greater private engagement in green initiatives. Investors typically adopt a longer-term perspective and are more inclined to allocate resources to sustainable projects when they trust the regulatory framework and anticipate consistent support for green endeavors. Hence, the good governance index harbors significant potential to propel and sustain private investment in the green sector, particularly when viewed from a long-term perspective.

Furthermore, the analysis indicates that a 1% rise in economic uncertainty corresponds to a significant decline of approximately 0.56% in private participation in green projects in the short term, and a more pronounced decrease of about 0.73% in the long term. This underscores the crucial role of economic stability and predictability in influencing private investments in sustainable endeavors. In the immediate period, heightened uncertainty tends to dissuade investors from channeling resources into green projects, as they opt for safer and more stable investment avenues amid economic uncertainty. Looking further into the future, persistent economic uncertainty can severely impede strategic planning and long-term commitments to sustainable projects, resulting in a more substantial negative impact on private investment. Investors may postpone or reduce their involvement in green initiatives due to perceived risks associated with economic instability.

Moreover, the analysis expresses that the growth in GDP and the increasing number of SMEs are associated with a notable motivation for heightened private engagement in green projects. These findings underscore the vital role of economic growth and a thriving SME sector in promoting sustainability. A growing GDP signifies a flourishing economy with more financial resources available for investments, including those in green projects. Additionally, the rise in SMEs, known for their agility and innovation, leads to an enhanced focus on eco-friendly practices and sustainability, making them active contributors to the green sector. However, it’s notable that the total loans provided by banks, while important in economic development, do not show statistical significance in motivating private participation in green projects.

After completing the estimation process, a critical next phase involves validating the reliability of the findings through a thorough robustness assessment and running stability tests of CUSUM and CUSUM Squared. Figure 1 shows the stability test results and confirms that the econometric model is stable and reliable. In pursuit of this objective, we conduct a time series analysis focusing on the case of the Philippines to assess the effects of the independent variables. The results of this robustness analysis are detailed in Table 8 below for comprehensive review and validation:

Fig. 1: Stability tests of CUSUM and CUSUM squared.
figure 1

Source: Authors.

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Table 8 ARDL estimation (robustness analysis).
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Conclusion and policy recommendations

The involvement of the private sector in investing in green projects has emerged as a contentious topic within scholarly discourse. This paper addresses this issue by evaluating annual data spanning from 2000 to 2020, utilizing the CS-ARDL approach. The study examines the influence of the good governance index on private participation in green projects, focusing on 11 Asian economies characterized by low and lower-middle income levels. The empirical findings confirmed a significant relationship between the good governance index and private participation in green projects. A 1% improvement in the good governance index was associated with a 0.34% increase in short-term private participation and a more substantial 0.64% increase in the long term. This disparity highlights the growing influence of the good governance index over time. In the short term, immediate shifts or responses were limited, possibly due to the time required for businesses to adapt to improved governance conditions. However, in the long term, enhanced governance mechanisms fostered an environment of stability, transparency, and investor confidence, encouraging greater private engagement in green initiatives. Investors, foreseeing a stable regulatory framework, tended to commit resources to sustainable projects, emphasizing the significant potential of the good governance index in driving and sustaining private investment in the green sector. Additionally, our analysis demonstrated that a 1% increase in economic uncertainty correlated with a notable decline of approximately 0.56% in private participation in green projects in the short term, and a more pronounced decrease of approximately 0.73% in the long-term. This underscored the critical influence of economic stability and predictability on private investments in sustainable initiatives. Heightened uncertainty deterred investors from allocating resources to green projects in the short term, opting for safer, more stable investments during uncertain economic periods. Looking ahead, persistent economic uncertainty severely hindered strategic planning and long-term commitments to sustainable projects, resulting in a more substantial negative impact on private investment. Investors tended to postpone or scale down green initiatives due to perceived risks associated with economic instability. Moreover, our analysis highlighted that GDP growth and the increasing number of SMEs motivated heightened private engagement in green projects. A growing GDP indicated a flourishing economy with more financial resources available for investments, including those in green projects. Furthermore, the rise in SMEs, known for their agility and innovation, contributed to a heightened focus on eco-friendly practices and sustainability, making them active contributors to the green sector. However, it’s important to note that the total loans provided by banks, although crucial for economic development, did not show statistical significance in motivating private participation in green projects. This suggests the need for tailored financial products and policies to incentivize private investment in sustainable projects and unlock the potential role of banking support in the green sector.

Low and lower-middle-income Asian economies are increasingly adopting collaborative governance strategies to boost private-sector involvement in green projects. One practical policy approach involves the development and deployment of comprehensive e-government services. By leveraging digital platforms and electronic services, governments can streamline processes, enhance transparency, and stimulate private-sector participation in green initiatives. Simultaneously, promoting digital transformation through the widespread dissemination of information and communication technology (ICT) is crucial. Encouraging businesses to embrace advanced technologies not only improves operational efficiency but also encourages innovation in sustainable practices, creating an environment conducive to private investment in green projects. Additionally, promoting sustainable corporate management is vital. Governments can incentivize and mandate sustainable practices within businesses, promoting responsible corporate behavior and fostering private-sector interest in environmentally sustainable ventures. Moreover, expanding the issuance of state-issued green bonds presents a significant opportunity. Governments can raise capital for green projects by issuing bonds dedicated to sustainable initiatives, attracting private investors, and supporting the expansion of the green sector.

In considering future research directions, two pivotal areas warrant significant exploration. Firstly, investigating the impacts of the COVID-19 pandemic on private green investment in low and lower-middle-income Asian economies is paramount. The pandemic has disrupted global economies and altered investment dynamics. Understanding how this unprecedented event has affected private investments in green projects is crucial for crafting adaptive strategies and policies. Researchers should delve into factors such as altered risk perceptions, shifts in investment priorities, and the role of government stimulus packages in shaping private green investment post-pandemic. Secondly, evaluating and advancing the private-public partnership (PPP) model in the context of green projects within these economies is critical. The collaborative synergy between private and public entities holds immense potential for driving sustainable initiatives. Future research should analyze successful PPP models, identifying best practices, challenges, and mechanisms for enhancing collaboration. Moreover, assessing the effectiveness of policy frameworks that encourage and facilitate such partnerships can provide valuable insights for optimizing PPPs in green projects.