FinTech, Regulation, Political Stability and Growth: Unlocking Environmental Performance in the EU

Asad Ullah, Junfeng Jiang, Shakeel Ahmad and Atta Ur Rahman

Politická ekonomie, vol. preprint

Abstract: This study examines how environmental regulation, political stability, financial technology, and economic growth shape environmental performance in the EU‑27 from 1991 to 2021. Using a panel quantile ARDL model with PMG and second‑generation estimators, it uncovers substantial heterogeneity across countries and performance levels. Environmental regulation and political stability alone are associated with weaker environmental performance, but their interaction with economic growth reverses this effect, showing that growth is crucial for making regulation and governance environmentally effective. Financial technology consistently improves environmental quality, although its benefits can be limited by overly strict regulation or rigid institutions. Trade openness and renewable energy display mixed or even adverse effects, indicating strong context dependence. The findings highlight the need for adaptive, innovation‑oriented governance that strategically combines regulation, growth, and financial technology to support green investment, technological progress, and long‑term environmental resilience across EU countries.

Keywords: Environmental performance; environmental regulation; political stability; financial technology; economic growth (search for similar items in EconPapers)
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DOI: 10.18267/j.polek.1548

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