Financial Market and Renewable Energy: Trends, Models and Impact

In the process of transition to a low-carbon economy, modern financial markets act as a catalyst for accumulating and directing capital toward supporting green transformation projects. The most dynamic segment is currently the green bond market, which channels investments into renewable energy production and industrial decarbonization. Despite the extensive coverage of green financial instruments in the works of leading scholars, the mechanism of interaction between financial flows and actual indicators of renewable energy production remains insufficiently explored and justified. The study employs a time series analysis methodology to investigate the interconnections between green bond market indicators and the dynamics of renewable energy production in EU countries. The research identified a long-term memory effect in the time series of renewable energy production: wind energy is significantly dependent on total energy output (24,7–39 %), while solar energy shows an increasing long-term influence (up to 26 % in the fifth period). It was found that green bond issuance was initially determined by its own inertia but gradually became dependent on renewable energy dynamics. These findings confirm hypothesis H1 regarding the interdependence between financial and energy sectors, but do not support H2 on the causal impact of green bonds on renewable energy expansion. At the same time, hypothesis H3 about the significant influence of the renewable energy market on green bond issuance got statistical confirmation from VAR model results.