The Impact of Energy Consumption, Financial Development, and Foreign Direct Investment on Environmental Quality: Fresh Insights from Static and Dynamic Panel Models

Henry Orach (), Shen Qianling (), Salina Adhikari (), Martinson Ankrah Twumasi (), Abbas Ali Chandio (), Anita Afra Arthur (), Peter Ocheng (), Buteme Irene Masangah () and Amone William ()
Additional contact information
Henry Orach: Sichuan Agricultural University
Shen Qianling: Sichuan Agricultural University
Salina Adhikari: Sichuan Agricultural University
Martinson Ankrah Twumasi: Sichuan Agricultural University
Abbas Ali Chandio: Sichuan Agricultural University
Anita Afra Arthur: Sichuan Agricultural University
Peter Ocheng: Uganda Martyrs University
Buteme Irene Masangah: Makerere University Business School
Amone William: Gulu University

Journal of the Knowledge Economy, 2025, vol. 16, issue 2, No 58, 7525-7579

Abstract: Abstract The current global trend shows that there is a tremendous increase in CO2 emission and that the level of emission is increasing with various development factors such as consumption of non-renewable energy, financial development, and FDI. However, very few studies have examined the impact of development factors that increase CO2 emissions, especially for African Countries. Therefore, this study contributes to the existing literature by examining the impact of these development factors (i.e., renewable energy consumption, non-renewable energy consumption, FDI, and financial development) on CO2 emission while also considering the importance of institutional quality and technical advancement in African countries. The study also addresses the issues of whether institutional quality and technological advancement have a role in protecting the environment and achieving faster economic growth. A panel between 1996 to 2020 and a model for estimation is used. Results of the analysis indicate that using renewable energy is a fundamental tool in promoting sustainable development by reducing environmental pollution. However, Financial developments and Foreign Direct investment positively impact CO2 emissions. Nevertheless, the majority of the institutional quality estimates are significant for reducing environmental pollution. Technological innovation is revealed as environmental degradation reducer and encourages sustainable growth. The findings call for African policymakers to formulate policies that encourage the use of renewable energy, fund renewable energy projects, and promote technology innovation through financial institutions to achieve sustainable development.

Keywords: Renewable energy consumption; Non-renewable energy consumption; Financial development; Foreign direct investment; Institutional quality; Technological progress (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s13132-024-01894-0 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:jknowl:v:16:y:2025:i:2:d:10.1007_s13132-024-01894-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13132

DOI: 10.1007/s13132-024-01894-0

Access Statistics for this article

Journal of the Knowledge Economy is currently edited by Elias G. Carayannis

More articles in Journal of the Knowledge Economy from Springer, Portland International Center for Management of Engineering and Technology (PICMET)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().