Natural resources, trade and fintech in the era of digitalization: A study of economies involved in Belt and Road Initiative

The present study aims to elucidate the impact of digitalization, fintech, trade, and industrial growth on natural resource consumption in emerging economies within the Belt and Road Initiative (BRI) countries. Employing the Cross-sectional Augmented Autoregressive Distributed Lag (CS-ARDL) method to mitigate Cross-sectional Dependence (CD) and heterogeneity in slope parameters across panels, this study investigates the previously mentioned relationship. Meticulously selecting panel data from twenty-four emerging countries spanning from 1995 to 2021 in the BRI region, the study offers a robust analysis. The findings of this study reveal the positive impact of digitalization on natural resources, as the proliferation of digital devices, data centers, and internet connectivity contributes to higher energy demands, surging the use of natural resources like fossil fuels and electricity. However, the negative impact of fintech on natural resource consumption shows the adoption of energy-efficient technologies, implementation of e-waste management policies, and advocacy for renewable energy addition in energy system. The result shows trade can reduce pressure on natural resources and endorses that BRI can improve trade activities in the member countries, however, actions such as emphasizing green technology adoption, allocating funds for conservation, promoting sustainable resource management, and investing in resource-efficient production, may contribute positively to preserving natural resources in the member nations. Thus comprehensive approach encompassing trade, industrial growth, and the promotion of financial technologies, collectively could strengthen sustainable resource management efforts in the BRI economies.