Effects of financial development, FDI and good governance on environmental degradation in the Arab nation: Dose technological innovation matters?

Abstract

The motivation of the study is to gauge the impact of financial development, FDI, Technological innovation, and good governance on environmental degradation in the Arab Nation for the period 1991–2019. Several techniques have implemented, including error correction-based cointegration, cross-sectional ARDL, Non-linear ARDL and Heterogeneous causality test for directional causality. The results of Slope of homogeneity, CSD and unit root test following CIPS and CADF, revealed that research variables are exposed with heterogeneity properties, cross-sectionally dependent, and all the variables become stationary after the first difference. The long-run cointegration between explained and explanatory variables established through error correction based cointegrating test. Referring to results derived from CS-ARDL, study exposed financial development has a detrimental effect on environmental sustainability, suggesting the intensification of CO2 emission and ecological instability. On the other hand, the role of FDI, GG, and TI exposed beneficiary in mitigating the environmental adversity. The asymmetric assessment revealed asymmetric association between explained and core explanatory variables which is valid in the long-run and short-run horizon. Finally, the casual association, study unveiled bidirectional causality between FDI, TI and ED [FDI←→ED; TI←→ED]. On the policy note, the study advocated that environmental improvement through financial channels should be efficiently monitored in the case of credit extension and incorporation with existing environmental policies.

Does financial innovation foster financial inclusion in Arab world? examining the nexus between financial innovation, FDI, remittances, trade openness, and gross capital formation

“…The study establishes a positive, statistically significant association, suggesting that continual foreign capital inflows induce the scope of financial services available to the population. The study findings align with the existing literature [1,13,88,128,129]. Specifically, a 10% growth in FDI inflows can augment the speed of unbanked population inclusion into a formal system by 3.19% in GMM estimation and 2.55% in system-GMM estimation by offering a diversified financial services economy.…”

“…Some households and firms prefer keeping their savings or surplus money in cash. However, most individuals and institutions prefer to use banks to convert their idle surplus money into investments through banks and financial bodies [1][2][3][4]. In this way, banks serve as an intermediary between those who want to invest and those who want to be invested.…”

Do environmental and institutional quality attribute to inflows of FDI in Lower-Middle income Nations? Evidences from asymmetric investigation

“…The nexus between environment and macro fundamentals emerged in empirical study as critical discussant issues in domestic and international areas. Understanding and acknowledging their association, over the past decade, a growing number of researchers performed empirical investigation for unheeding and exploring new insight see, for instance, Liu, et al [52]; [53][54][55][56][57][58]…”

Foreign Direct Investment, Technological Innovations, Energy Use, Economic Growth, and Environmental Sustainability Nexus: New Perspectives in BRICS Economies

“…The results indicated that FDI decreases CO 2 emissions. Ju et al [39] investigated the impressions of foreign direct investment, financial development, and governance on the environmental quality of Arab countries and found that FDI significantly improves the environmental quality in Arab economies. Pao and Tsai [40] examined the long-run relationship between energy use, FDI, and CO 2 emissions for BRIC (Brazil, Russia, India, and China) economies by using panel cointegration and causality analyses.…”