Climate Change and Financial Technology Nexus in GCC Countries: Evidence from the Asymmetric ARDL Approach

Fahima Charef and Mohammed Ibrahim Alattass ()
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Fahima Charef: Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar II, Tunis 2092, Tunisia
Mohammed Ibrahim Alattass: Department of Management Information Systems, College of Business, University of Jeddah, Jeddah 23218, Saudi Arabia

Sustainability, 2025, vol. 17, issue 21, 1-19

Abstract: While existing literature has explored the effects of financial technology on CO 2 emissions, there has been limited research examining how variations in financial technology itself influence its impact on emissions. To supplement the shortness of existing literature, this paper empirically investigates the dynamic effects of economic growth, urbanization, and four dimensions of financial technology—mobile cellular technology, financial development, market development, and institutional development on CO 2 emissions in the Gulf Cooperation Council (GCC) countries. The study utilizes annual time series data covering 24 years, from 2000 to 2023. To achieve the research objectives, a robust Auto-regressive Distributed Lag (ARDL) method was employed. The findings reveal a bidirectional causal relationship between CO 2 emissions and economic growth, as well as between CO 2 emissions and urbanization. Conversely, a one-way causal relationship was identified between financial development and financial institutions, and CO 2 emissions. Based on these results, the study recommends that GCC countries promote renewable energy sources and low-carbon industries while gradually reducing reliance on fossil fuels. Additionally, this study suggested that policymakers focus on developing financial technology within their governments to facilitate the growth of a green economy and guide it towards an ecologically sustainable trajectory.

Keywords: financial technology; urbanization; economic growth; CO 2 emissions; ARDL method; GCC countries (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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