Does financial development moderate the link between technological innovation and environmental indicators? An advanced panel analysis

Hossein Ali Fakher () and Zahoor Ahmed ()
Additional contact information
Hossein Ali Fakher: Ayandegan Institute of Higher Education
Zahoor Ahmed: Bahçeşehir Cyprus University

Financial Innovation, 2023, vol. 9, issue 1, 1-19

Abstract: Abstract This study analyzes the role of financial development (FD) on the impact of technological innovation (TI) on six environmental quality indicators for the 25 economies that are part of the Organization for Economic Cooperation and Development for the period from 2000 to 2019. We use a two-step dynamic generalized method of moments approach to understand this relationship. The results show that FD augments the positive effects of TI on four of the six environmental indicators, namely ecological footprint, adjusted net savings, pressure on nature, and environmental performance. However, no significant effects on environmental sustainability and environmental vulnerability indices were found. When considering all of the environmental quality indicators, TI appears to enhance environmental quality. We find evidence to support the existence of the environmental Kuznets curve in the context of each environmental indicator and economic growth. Moreover, FD and energy consumption appear to accelerate environmental degradation. Based on these results, FD should be viewed as an important parameter in designing policies for innovation to achieve the goal of net-zero carbon emissions.

Keywords: Technological innovation; Financial development; Two-step dynamic Sys-GMM estimator; Environmental quality indicators; Environmental sustainability (search for similar items in EconPapers)
JEL-codes: C33 O31 O44 Q55 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1186/s40854-023-00513-2 Abstract (text/html)

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:fininn:v:9:y:2023:i:1:d:10.1186_s40854-023-00513-2

Ordering information: This journal article can be ordered from
http://www.springer. ... nomics/journal/40589

DOI: 10.1186/s40854-023-00513-2

Access Statistics for this article

Financial Innovation is currently edited by J. Leon Zhao and Zongyi

More articles in Financial Innovation from Springer, Southwestern University of Finance and Economics
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().