Assessing the nexus between fintech, natural resources, government effectiveness, and environmental pollution in China: A QARDL study

Abstract

Despite its pledge and efforts towards sustainability, China has not been able to live up to its environmental expectations. The road towards carbon neutrality still seems to be faraway. There has been light at the end of the tunnel with the various efforts China has undertaken to reduce environmental pollution (ENP). However, such efforts are not enough and the country must adopt some strategies which can be used to curb environmental pollution and promote more sustainable growth for the country in the long run. Hence, this study assess the role of Fintech (FNT), Natural resources (NTR), and government effectiveness (GVT) on environmental pollution. For that purpose, the study uses the novel Quantile Autoregressive Distributed Lag (QARDL) method, which assist in examining the impact of modelled series in multiple quantiles. The findings of the study suggest that Fintech can help to promote the use of digitalization within the financial industry and can be an efficient way to reduce CO2 emissions. Green finance and green investments can also be promoted using FinTech. The use and extraction of Natural resources are detrimental to the environment. Lack of government effectiveness can lead to severe environmental problems in the form of lax laws and corruption. The study recommends China promote the use of green energy, nurture the growth of Fintech and ensure that it works to develop a green image of the government to facilitate the growth of a green economy.