Assessing the Influence of Financial Inclusion on Environmental Degradation in the ASEAN Region through the Panel PMG-ARDL Approach

Financial inclusion and environmental pollution in sub-Saharan Africa: moderating effects of economic growth and renewable energy

A thriving literature exists about the role of financial inclusion in socio-economic development. Nevertheless, the environmental effects of financial inclusion are largely unknown in the literature, especially in sub-Saharan African countries. Therefore, this study explores the association between financial inclusion and CO2 emissions utilizing data from 23 sub-Saharan Africa for the period 2004-2019. Based on different estimation methods such as dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), canonical correlation regression (CCR), and an instrumental variable generalized-method of moment (IV-GMM), the results show that financial inclusion is responsible for a substantial increase in CO2 emissions. In addition, financial inclusion moderates economic growth, resulting in higher CO2 emissions. Alternatively, financial inclusion moderates renewable energy use to lower CO2 emissions. The outcomes also verify the presence of the Environmental Kuznets Curve hypothesis (EKC). This study proposes uniting financial inclusion and environmental policies as a strategy for reducing CO2 emissions in sub-Saharan Africa.

Investigating symmetrical influence of economic expansion, oil price, and industrial production on trade deficit: a policy pathway toward three neighboring Asian states

The intense objective of the present study is to investigate the symmetrical effectiveness of economic expansion, inflation rate, oil price, interest rate, and industrial production on trade deficit of the three neighboring states (China, Pakistan, and India). Westerlund bootstrap LM (Lagrange multiplier) panel co-integration test, Dumitrescu Herlin method, PMG-ARDL model, quantile regression, and quarterly data of last 15 years (2006Q1 to 2020Q4) have been utilized to envisage outcomes. Initial measurements validate the existence of stable co-integration and uni-directional causality among variables. Nevertheless, PMG-ARDL measures evaluates that in both long and short span of time, except industrial production all other regressors (economic expansion, inflation rate, oil price, and interest rate) positively influences the trade deficit in three neighboring states. Furthermore, robust estimates of quantile regression also authenticate the correctness of the above discuss relationship in study economies by evaluating positive (negative) impact of economic expansion, inflation rate, oil price, and interest rate (industrial production) on trade deficit. Thus, in policy pint of view, to lessen trade deficit hazard in studied economies, it is necessarily needed to encourage industrial production, replaced fossil fuel using outdated gadgets with advance green technology instruments, control inflation, and interest rate in single digit through strong budgetary and monetary policies and maintain economic expansion with appropriate and comprehensive taxation system.

The impact of economic growth, tourism, natural resources, technological innovation on carbon dioxide emission: evidence from BRICS countries

The main objective of this manuscript was to investigate the relationships among economic development, tourism, the use of natural resources, technical advancement, and carbon dioxide emissions in the BRICS group of nations. Data from the panel was gathered from 1995 to 2018. Modern methodology tools including the CS-ARDL tests, Westerlund cointegration tests, and panel data unit root tests have been used in this study. Results of the models show that all the variables were transformed to the first difference to make it stationary. The Westerlund model test results suggest that dependent and independent variables have robust cointegration. Results of the CS-ARDL models reveal that all the variables signed, and significance are aligned with the economic theory. It indicates that except for tourism, the rest of the variables like technical innovation, natural resources, and economic growth have positive and significant effects on carbon dioxide emissions both in the short and long runs. Additionally, a 1% rise in economic growth, technical innovation, and natural resources over the long term would raise carbon dioxide emissions in the BRICS economies by 1.79%, 0.15%, and 0.10%, respectively. However, a 1% increase in tourism would result in a 0.39% decrease in carbon dioxide emissions among the nations in the panel data set. Therefore, the promotion of sustainable tourism and advancement in technological innovation is highly important in these countries, so the high impact of environmental degradation pressure may reduce to some extent. An in-addition comprehensive set of policies should be made on encouraging low-carbon transportation, promoting sustainable tourism certification, boosting local produce, reducing waste management, and provide education and awareness campaigns to tourists.

Relationship between financial inclusion and carbon emissions: International evidence

The nexus between financial inclusion and carbon emissions is becoming an increasingly important topic, given the augmented awareness of the negative impacts of climate change and carbon emissions on the environment and human health. In this study, we examine the impact of financial inclusion on carbon emissions using the STIRPAT framework for 102 countries from 2004 to 2020. We measure financial inclusion as a composite index, using principal component analysis (PCA) from five financial inclusion proxies. Our robust panel regression estimations suggest an N-Shaped relationship between financial inclusion and carbon emissions. The N-shaped Environmental Kuznets Curve (EKC) implies that the impact of financial inclusion on carbon emission is nonlinear and changes from an inverted U-shaped to a U-shaped. This finding is strong in developing countries and weak in advanced countries. It is also robust across our two normalized measures of financial inclusion as well as across different estimation techniques. These findings suggest adapting a universal environmental strategy that enhances financial inclusion through strong and accessible financial systems, particularly for low-income countries. Our results further suggest that government authorities and policymakers need to develop well-directed and inclusive financial policies that consider the varying levels of governance, regulations, and income across countries.

Realizing the 2050 Paris climate agreement in West Africa: the role of financial inclusion and green investments

International organizations have emphasized the importance of global economies supporting efforts to combat climate change. The Paris Agreement or Agenda 2050 urges nations to ensure that the increase in global temperature is limited to 1.5 °C. Studies have analyzed the factors that contribute to harmful emissions, particularly carbon dioxide emissions, in order to limit temperature rise. However, since there are other equally harmful pollutants, this study evaluates the impact of financial inclusion and green investment on reducing greenhouse gas emissions. The study uses data from West Africa, where environmental pollution has significantly increased. The study employed regression analysis while controlling for economic growth, foreign direct investment (FDI), and energy consumption. The study's key findings reveal that financial inclusion and green investment have a monotonic effect on reducing greenhouse gas emissions. Additionally, the study confirms the environmental Kuznets curve hypothesis and the pollution haven effect for the region. Technological innovation reduces pollution, but green investment and financial inclusion reinforce this effect. Therefore, the study recommends that governments in the sub-region commit to supporting green investment and environmentally friendly technological innovations. It is also crucial to strictly enforce laws regulating the operations of multinational corporations in the region.

Empirical nexus between financial inclusion and carbon emissions: Evidence from heterogeneous financial economies and regions

We aim to investigate the empirical nexus between carbon emissions and financial inclusion for a panel of 74 countries from 2004 to 2020 based on the environment kuznets curve (EKC). Using the advanced panel data analysis framework of Driscoll-Kraay, Generalised linear model, and Prais-Winsten test for the entire sample and heterogeneous subsamples, we document an inverted U-shape relationship between carbon emissions and inclusive financial system. Notably, an inverted U-shape relationship is established in developed, emerging and frontier economies except in standalone economies. Furthermore, the analysis of region-wise subsamples reveals that nonlinear relationship varies across regions. The heterogeneous response of financial inclusion in curtailing environmental degradation provides vital policy insights. It suggests that financial inclusion can be used as a mitigation measure based on well-structured and robust regulatory and legal frameworks. These frameworks would create synergy effects of financial inclusion in designing policies and addressing issues related to sustainable development and climate change.