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Exploring the Impacts of Banking Development, and Renewable Energy on Ecological Footprint in OECD: New Evidence from Method of Moments Quantile Regression

Author

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  • Magdalena Radulescu

    (Department of Finance, Accounting and Economics, University of Pitesti, 110040 Pitesti, Romania
    Institute for Doctoral and Post-Doctoral Studies, University Lucian Blaga Sibiu, 550024 Sibiu, Romania)

  • Daniel Balsalobre-Lorente

    (Department of Applied Economics I, University Castilla La-Mancha, 13071 Cuenca, Spain
    Department of Applied Economics, University of Alicante, 03690 Alicante, Spain)

  • Foday Joof

    (Centre for Financial Regulation and Risk Management, Banking and Finance Department, Eastern Mediterranean University, Famagusta 99628, Turkey)

  • Ahmed Samour

    (Department of Accounting, Dhofar University, Salalah 211, Oman)

  • Turgut Türsoy

    (Banking and Finance Department, Near East University, Lefkosa 99040, Turkey)

Abstract

Although previous related studies illustrate several factors that reduce and eliminate ecological pollution, empirical evidence that examines the impact of banking development on footprint ecological quality is missed. This study explores the impact of banking development, renewable energy consumption, and economic growth on the ecological footprint of 27 OECD countries spanning data from 1990 to 2018. Using the method of moments quantile regression (MMQR), the results indicated that a 1% increase in banking expansion is projected to augment the ecological footprint in the OECD nations across all quantiles (first to ninth). Thus, the results affirm that banking development dampens ecological sustainability in the OECD nations. In contrast, the results indicate that renewable energy promotes ecological sustainability in the OECD nations across all quantiles (first to ninth). The empirical findings suggest that OECD policymakers should regard banking and economic development as a “green energy fostering mechanism” while designing policies to promote ecological friend energy sources. Moreover, as part of their core mandates, central banks, and regulatory authorities should promote financial innovation in the banking sector to mobilize the required capital to facilitate nature conservation and restoration.

Suggested Citation

  • Magdalena Radulescu & Daniel Balsalobre-Lorente & Foday Joof & Ahmed Samour & Turgut Türsoy, 2022. "Exploring the Impacts of Banking Development, and Renewable Energy on Ecological Footprint in OECD: New Evidence from Method of Moments Quantile Regression," Energies, MDPI, vol. 15(24), pages 1-14, December.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:24:p:9290-:d:996528
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