Can financial inclusion be an effective mitigation measure? evidence from panel data analysis of the environmental Kuznets curve

Renzhi, Nuobu; Baek, Yong

doi:10.1016/j.frl.2020.101725

Cited by 162 publications

(93 citation statements)

References 16 publications

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“…The empirical results show nonlinearity between nancial development and CO2 emissions. Renzhi and Baek (2020) examine the impact of nancial inclusion on CO2 emissions in an environmental Kuznets curve (EKC) framework based on 103 countries, and support the inverted U-shaped relationship. Zaidi et al (2019) analyse the link between nancial development and CO2 emissions based on advanced statistical tests such as updated bias-corrected and continuously updated fully modified estimators in 17 APEC countries from 1990 to 2016 using an EKC framework.…”

Section: Literature Reviewmentioning

confidence: 94%

“…Factor analysis is considered to be more suitable in the case of a signi cant Bartlett's test (P < 0.05). The KMO test reveals the proportion of common variance that might be caused by underlying factors (Renzhi and Baek, 2020). The KMO index ranges from 0 to 1, with scores larger than 0.5 generally indicating that the factor analysis is suitable.…”

Section: Operationalization -Financial Inclusion and Carbon Emissionmentioning

confidence: 99%

“…The second way in which our study contributes to the literature, is that it differs from recent notable studies, such as Le et al (2020) and Renzhi and Baek (2020), which ignore the issues of long-short causality, pairwise causality, endogeneity, heteroscedasticity and simultaneity problems, in three ways. Firstly, we apply the method of Dumitrescu and Hurlin (hereafter D-H) (2012) to test the pairwise causality and determine the direction of the causal relationship.…”

Section: Introductionmentioning

confidence: 99%

“…Theoretically, there exist divergent views among researchers regarding the relationship between nancial development and climate change (Jiang and Ma, 2019). On one hand, scholars suggest that nancial development mitigates GHG emissions by facilitating the energy supply sector to upgrade production technology and equipment through the mitigation of nancial constraints by lower borrowing cost (Renzhi and Baek, 2020). Hence, it is evident that the development of the nancial sector, which shows the real availability of capital and funding channels through banks and stock markets, can positively contribute to environmental sustainability via the reduction of GHG emissions (Gök, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…The use of these energy intensive goods poses a serious threat to environmental sustainability. So far, two empirical studies, Le et al (2020) and Renzhi and Baek (2020), establish the relationship between nancial inclusion and CO2 emissions. However, the ndings of these studies are contradictory and inconclusive.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Financial Inclusion and CO2 Emissions in Asia: Implications for Environmental Sustainability

Hussain

Ahmad

Shahzad

2021

Preprint

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We examine the relationship between financial inclusion and carbon emissions. For this purpose, we develop a composite indicator of financial inclusion based on a broad set of attributes through principal component analysis (PCA) for 26 countries in the Asia region. Our robust panel regression analysis reveals a significant positive long-term impact of financial inclusion on carbon emissions. The pairwise causality test reveals unidirectional long-term causality running from financial inclusion to carbon emissions. The study suggests that policy makers may design policies that integrate accessible financial systems into climate change adaptation strategies in order to neutralize the side effect of financial inclusion deteriorating environmental quality and inclusive sustainable economic growth. JEL ClassificationO16; O44, Q54

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Section: Literature Reviewmentioning

confidence: 94%

Section: Operationalization -Financial Inclusion and Carbon Emissionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Financial Inclusion and CO2 Emissions in Asia: Implications for Environmental Sustainability

Hussain

Ahmad

Shahzad

2021

Preprint

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Do venture capital investments contribute to the achievement of the sustainable development goals?

Gucciardi

2024

Bus Strat Env

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Achieving the goals of the 2030 agenda for sustainable development requires substantial investment and depends on the ability to attract private capital to complement public resources. Venture Capital (VC) investments have traditionally focused on sectors such as technology, healthcare, and clean energy, which align closely with the enhancement of sustainable development, and VC investors can accelerate progress toward sustainability by providing expertise and mentorship to startups working on sustainable solutions. This study aims to contribute to the literature on the intersection between finance and sustainability by investigating whether higher VC investments are associated with a higher level of achievement of the Sustainable Development Goals (SDGs). Using a panel data fixed effect model on a sample covering more than 100 countries, we find that a higher level of VC activity is associated with stronger SDGs' performances, with this effect being primarily driven by economic factors. We document heterogeneous effects related to the round of investments as well as the organizational form of VC investors and the industry and country of the VC‐backed companies.

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How does monetary policy moderate the influence of economic complexity and technological innovation on environmental sustainability? The role of green central banking

Ahmad

Šatrović

2023

Int. J Fin Econ

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The debate on whether central banks should consider climate change risks in their mandate could reach some informed consensus given it is explicit how monetary policy, directly and indirectly, interacts with environmental sustainability. To unriddle this issue, we touch upon a novel perspective by exploring how monetary policy moderates the influence of economic complexity and technological innovation on energy productivity and carbon productivity in the presence of the labour force participation ratio, trade openness, financial inclusion, and GDP. Our study builds upon the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) structure, considering the Group of Seven (G7) countries as the analytical laboratory over the 1995–2019 period. The principal outcomes based on the novel Method of Moments Quantile Regression (MMQR) are as follows: A higher level of economic complexity is associated with enhanced environmental sustainability. In addition, technological innovation is beneficial to environmental sustainability, especially across countries reporting moderate levels of environmental sustainability. Considering the direct impact, contractionary monetary policy deteriorates environmental sustainability, while expansionary monetary policy promotes it for green central banking in place. Regarding the moderating impacts, expansionary monetary policy is unveiled to manifest beneficial environmental impacts of economic complexity and technological innovation, provided that inflationary pressures remain under control. Based on our findings, it is recommended to formulate a monetary policy inclusive of climate‐related risks to capitalize on the environmentally favourable impacts of economic complexity and technological innovation. Finally, the monetary expansions keeping the inflationary pressures under control would benefit environmental sustainability.

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Can financial inclusion be an effective mitigation measure? evidence from panel data analysis of the environmental Kuznets curve

Cited by 162 publications

References 16 publications

Financial Inclusion and CO2 Emissions in Asia: Implications for Environmental Sustainability

Financial Inclusion and CO2 Emissions in Asia: Implications for Environmental Sustainability

Do venture capital investments contribute to the achievement of the sustainable development goals?

How does monetary policy moderate the influence of economic complexity and technological innovation on environmental sustainability? The role of green central banking

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