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Financial Efficiency and Its Impact on Renewable Energy Demand and CO 2 Emissions: Do Eco-Innovations Matter for Highly Polluted Asian Economies?

Author

Listed:
  • Muhammad Hafeez

    (Institute of Business Management Sciences, University of Agriculture, Faisalabad 38040, Pakistan)

  • Saif Ur Rehman

    (Faculty of Management, Canadian University Dubai, Dubai 415053, United Arab Emirates)

  • C. M. Nadeem Faisal

    (Department of Computer Science, National Textile University, Faisalabad 37610, Pakistan)

  • Juan Yang

    (Chinese Academy of Sciences and Technology for Development, Beijing 100038, China)

  • Sana Ullah

    (School of Economics, Quaid-i-Azam University, Islamabad 15320, Pakistan)

  • Md. Abdul Kaium

    (Department of Marketing, University of Barishal, Barishal 8254, Bangladesh)

  • Muhammad Yousaf Malik

    (Institute of Business Management Sciences, University of Agriculture, Faisalabad 38040, Pakistan)

Abstract

The analysis aims to examine the impact of eco-innovation and financial efficiency on CO 2 emissions and renewable energy consumption in highly polluted Asian economies, including China, India, Russia, and Japan. For empirical analysis, we have applied the ARDL pooled mean group (ARDL-PMG) model. The long-run estimated coefficient of environmental innovations is positively significant in both renewable energy models and negatively significant in the CO 2 emissions model. These results imply that environmental innovations help facilitate renewable energy consumption and reduce CO 2 emissions. On the other side, the estimates of financial development are insignificant in both renewable energy and CO 2 emissions models. However, the estimates of financial institution efficiency and financial markets are positively significant in both renewable energy and CO 2 emissions models, implying that financial institutions and market efficiency increase renewable energy consumption and decrease CO 2 emissions.

Suggested Citation

  • Muhammad Hafeez & Saif Ur Rehman & C. M. Nadeem Faisal & Juan Yang & Sana Ullah & Md. Abdul Kaium & Muhammad Yousaf Malik, 2022. "Financial Efficiency and Its Impact on Renewable Energy Demand and CO 2 Emissions: Do Eco-Innovations Matter for Highly Polluted Asian Economies?," Sustainability, MDPI, vol. 14(17), pages 1-12, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:17:p:10950-:d:904754
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    References listed on IDEAS

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