Asymmetric linkages between renewable energy consumption, financial integration, and ecological sustainability: Moderating role of technology innovation and urbanization

Abstract

Despite their economic success, the BRICS countries have yet to achieve environmental sustainability. On the other hand, these countries will not be able to maintain their economic expansion if they do not protect the natural environment. In this regard, this paper intends to assess the effects of financial integration (globalization) on ecological footprint. The paper also considers other ecological footprint drivers, including economic expansion, urbanization, renewable energy and technological innovation. The research utilizes a dataset spanning from 1990 to 2018. The study employed the method of moments quantile regression (MMQR) approach, which is robust to cross-sectional dependence and slope homogeneity issues. The outcomes from the MMQR disclose that the effect of financial globalization on ecological footprint is positive across all quantiles (0.1–0.90), thus validating the pollution haven hypothesis (PHH) in the BRICS nations. Furthermore, both renewable energy and technological innovation curb ecological footprint across all quantiles (0.1–0.90). Moreover, technological innovation is proven to impact the environment positively across all quantiles (0.1–0.90) via the path of urbanization. As a result, technological innovation is projected to help the BRICS nations achieve sustainable urbanization. The DOLS, FMOLS, FE-OLS outcomes also validate the outcomes of MMQR. Based on these results, policies were proposed.