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 148 publications

(93 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…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

View full text Add to dashboard Cite

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

show abstract

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

View full text Add to dashboard Cite

show abstract

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

View full text Add to dashboard Cite

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.

show abstract

Does financial inclusion limit carbon dioxide emissions? Analyzing the role of globalization and renewable electricity output

Qin

Raheem

Murshed

et al. 2021

Sustainable Development

260

View full text Add to dashboard Cite

On the role of financial inclusion in terms of promoting a sustainable environment, very limited number of studies are available in the existing literature. These studies do not directly address or link financial inclusion with carbon dioxide emissions.Therefore, this study aims to specifically investigate the effects of financial inclusion on carbon dioxide emissions along with the role of globalization and renewable electricity generation for the case of the emerging seven economies over the [2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014][2015][2016] period. This study uses panel quantile regression analysis for estimations, which takes into account the non-normality issue of the data. The long-run relationships among carbon dioxide emissions, financial inclusion, renewable electricity generation, globalization, and economic growth are confirmed by Kao and Johansen panel cointegration tests. Besides, the results from quantile regression analysis confirmed that financial inclusion is linked with carbon dioxide emission reductions at the 25th and 50th quantiles; however, it cannot explain the variations in the carbon dioxide emission levels at the 75th and 95th quantiles. Moreover, globalization and renewable energy electricity are found to curb carbon dioxide emissions at all quantiles.Further, the results confirmed the EKC hypothesis for E7 countries at all the quantiles. In line with these findings, this study recommends enhancing financial inclusivity, promoting globalization, elevating renewable electricity generation capacities, and ensuring greener economic growth to lower down the carbon dioxide emission levels across the E7 countries.

show abstract

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

Cited by 148 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

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

Does financial inclusion limit carbon dioxide emissions? Analyzing the role of globalization and renewable electricity output

Contact Info

Product

Resources

About