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The Triple Impact of Innovation, Financial Inclusion and Renewable Energy Consumption on Environmental Quality in Some Emerging Economies

Author

Listed:
  • Muhittin Kaplan

    (Department of Economics, Ibn Haldun University, Istanbul, Turkey)

  • Mohammed Muntaka Abdul Rahman

    (Department of Economics, Ibn Haldun University, Istanbul, Turkey)

  • Asad-ul-Islam Khan

    (Department of Economics, Ibn Haldun University, Istanbul, Turkey)

  • Hasan Vergil

    (Department of Economics, Ibn Haldun University, Istanbul, Turkey)

Abstract

This paper investigates the triple impact of innovation, financial inclusion, and renewable energy consumption on the quality of the environment. The study employed data between 2007 and 2019 from selected emerging economies. Using the fixed effect, two-step GMM econometric method. The result found that financial inclusion and innovation have a positive relationship with carbon emissions, hence contributing to the reduction in the quality of the environment. Renewable energy consumption was found to reduce carbon emissions. Similarly, the interactive terms TPT*FIN, FIN*REN, and TPT*REN were all negatively related to carbon emissions. The study recommends that governments should increase financial instruments to support innovation that will enhance environmental quality. Additionally, governments should strengthen their environmental policies. Financial institutions should encourage firms to access green finance solutions. The value and originality of this study is the introduction of the interactive term, which throws more light on variables that affect the environment and through which channels. Moreso, there are few works with these interactive terms relative to emerging economies. Third, there are no previous studies that employed the fixed effect two-step GMM to analyze the impact of financial inclusion, technological innovation, and renewable energy consumption on environmental quality.

Suggested Citation

  • Muhittin Kaplan & Mohammed Muntaka Abdul Rahman & Asad-ul-Islam Khan & Hasan Vergil, 2024. "The Triple Impact of Innovation, Financial Inclusion and Renewable Energy Consumption on Environmental Quality in Some Emerging Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 140-149, July.
    • Handle: RePEc:eco:journ2:2024-04-13
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    References listed on IDEAS

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    1. Owandjokuna Jovial Fundji, 2024. "The Impact of Financial Inclusion on Economic Growth based on East, West and Southern Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 14(5), pages 203-209, September.

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    More about this item

    Keywords

    Financial Inclusion; Innovation; Renewable Energy; Emerging Economies; Fixed Effect GMM;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q29 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Other
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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