Corporate management and green finance as drivers of sustainable development: evidence from Germany

This study examines the role of corporate management in advancing green finance and sustainable development in Germany using annual data covering the period from 1995 to 2022. The analysis integrates a composite Sustainable Development Index a Corporate Management Index and a Green Finance Index to capture the interaction between governance structures financial mechanisms and sustainability outcomes. An autoregressive distributed lag framework is employed to distinguish between short run dynamics and long run relationships among the variables. The empirical results indicate a stable long run association between green finance corporate management quality and sustainable development while selected control variables display heterogeneous effects. The findings highlight the importance of governance driven financial strategies in supporting sustainability objectives. The study contributes to the literature by offering an integrated empirical assessment focused exclusively on a fully observed sample period ensuring internal consistency and econometric validity. Policy implications are discussed with specific relevance for corporate regulators and sustainability oriented financial supervision. This study makes several original contributions to the literature on green finance corporate governance and sustainable development. First it develops an integrated empirical framework that simultaneously examines green finance and corporate management as joint drivers of sustainable development within a single country context rather than treating them as isolated mechanisms. Second the study introduces two purpose built composite indices namely the Corporate Management Index and the Sustainable Development Index which are tailored to the institutional economic and regulatory characteristics of Germany thereby moving beyond fragmented single indicator approaches commonly used in prior research. Third by employing an ARDL framework the analysis captures both short run adjustments and long run equilibrium effects allowing for a more nuanced understanding of dynamic sustainability transitions. Fourth the study provides evidence that market based green financial mechanisms exert stronger and more persistent effects on sustainability outcomes than traditional fiscal instruments highlighting the importance of governance driven financial strategies. Finally by focusing on a fully observed and internally consistent sample period the study ensures econometric validity and offers policy relevant insights that are directly applicable to regulators corporate supervisors and sustainability oriented financial institutions.