Environmental pollution, innovation, and financial development: an empirical investigation in selected industrialized countries using the panel ARDL approach

Muntazir Hussain (), Ramiz Ur Rehman () and Usman Bashir ()
Additional contact information
Muntazir Hussain: Sohar University
Ramiz Ur Rehman: Sohar University
Usman Bashir: University of Bahrain

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 11, No 83, 29217-29248

Abstract: Abstract The Paris Accord emphasizes the obligation of nations to contribute to Nationally Determined Contributions and mitigate environmental pollution. Consequently, countries worldwide are actively seeking to discern the influence of various factors on improving environmental quality. Among these factors, innovation and financial sector development are indispensable in curtailing environmental pollution. Employing panel data from 1996 to 2018, we investigate the tripartite relationship between environmental pollution, innovation, and financial development within the G-20 countries. The findings of this study reveal that both innovation and financial development contribute to reducing environmental pollution in the long term. However, no significant relationship is observed in the short term between innovation, financial development, and environmental pollution. To further explore these dynamics, we conduct separate analyses for each country to examine the connection between innovation, financial development, and environmental pollution. Our results indicate that the short-term impact of innovation varies considerably across most G-20 countries. Nonetheless, in the long term, enhanced innovation catalyzes diminishing environmental pollution. These findings underscore the significance of innovation as a pivotal factor in alleviating environmental pollution through innovations in products, processes, and technologies. Similarly, financial sector development plays a vital role in promoting environmental quality by facilitating initiatives such as green lending and supporting research on green technologies and renewable energy solutions. Consequently, countries should reassess their policies and take proactive measures to address and mitigate environmental pollution effectively.

Keywords: Ecological footprint; Environmental degradation; Autoregressive distributed lag model; Sustainable development (search for similar items in EconPapers)
JEL-codes: O13 O16 O30 O50 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10668-023-03860-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:endesu:v:26:y:2024:i:11:d:10.1007_s10668-023-03860-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10668

DOI: 10.1007/s10668-023-03860-3

Access Statistics for this article

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development is currently edited by Luc Hens

More articles in Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().